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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 05 May 20
SUPRAMAXES: YTD SLIDE HAS BEEN 45%, WITH THE AVERAGE FOR 2020 TCA HOLDING AT US$5,793 - ALLIED
It has been almost three months since the WHO officially categorized the current coronavirus outbreak as a global pandemic, an outbreak that has br ...
Monday, 04 May 20
U.S. ESTIMATED COAL PRODUCTION FALL 39.4% YEAR ON YEAR IN THE WEEK ENDED APRIL 25 - EIA
Estimated U.S. coal production totaled about 8.6 million short tons (MMst) For the week ended April 25, 2020, says EIA in its latest report.
E ...
Saturday, 02 May 20
SUPRAMAX: ASIA, STRONGER NUMBERS - A 55.000-DWT WAS FIXED FROM INDONESIA TO CHINA IN THE MID $6,000S - BALTIC BRIEFING
Capesize
A tepid week for the big ships, as macro concerns continued to weigh heavily on the index. All of the major voyage routes lost value, ...
Friday, 01 May 20
KOSPO INVITED OFFER FOR 5600 NCV COAL FOR Q3 2020 LOADING
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 260,000 Metric Tons (MT) steam coal for Boryeong Power ...
Friday, 01 May 20
GLOBAL COAL DEMAND TO FALL BY ABOUT 8% IN 2020,THE LARGEST DROP SINCE WORLD WAR II - IEA
We expect global coal demand to fall by about 8% in 2020, the largest drop since World War II, with coal use declining in virtually every sector of ...
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- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Economic Council, Georgia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
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