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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, 10 March 20
CHINA'S COAL-RICH PROVINCE ENSURES ENERGY SUPPLY AMID EPIDEMIC - XINHUA
China’s coal-rich province of Shanxi has seen more than 500 coal mines resume production in February, which ensured energy supply amid the ou ...
Monday, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
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- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Sical Logistics Limited - India
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Goldman Sachs - Singapore
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