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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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Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
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