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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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Wednesday, 04 March 20
MARKET INSIGHT - INTERMODAL
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CHINA PROVINCE TO CLOSE 10 MLN TONNES OF COAL CAPACITY IN 2020 - XINHUA
Southwest China’s Guizhou Province plans to phase out 10 million tonnes of outdated coal production capacity by closing 80 coal mines in 2020 ...
Wednesday, 04 March 20
UKRAINE PRODUCED OVER 2.55 MLN TONNES OF COAL IN FEBRUARY - UKRINFORM
In February 2020, Ukraine produced over 2.55 million tonnes of coal, which is 0.2% less than planned.
The Coal Miners Union of Ukrai ...
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- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- The University of Queensland
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
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