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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, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Star Paper Mills Limited - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Siam City Cement PLC, Thailand
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- ASAPP Information Group - India
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- The University of Queensland
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
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