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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, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
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The index, released by Chi ...
Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
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Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
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The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
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PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
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- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Planning Commission, India
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Minerals Council of Australia
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- The Treasury - Australian Government
- White Energy Company Limited
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
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