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