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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, 12 February 20
COAL INDIA WILL EXCEED LAST YEAR'S PRODUCTION FIGURES: OFFICIAL - PTI
Despite coal production being hampered at Dipka mines due to prolonged rains, Coal India Ltd will exceed last year’s production figures, a to ...
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THE SHIPPING INDUSTRY SEES FREIGHT MARKETS IN A COMPLETE STATE OF COLLAPSE AS DEMAND GETS PARALYZED DUE TO CORONAVIRUS OUTBREAK - ALLIED
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WORLD STEEL PRODUCTION IN 2019 - BANCHERO COSTA
In a worrying development, global steel production slowed down considerably in the fourth quarter of 2019. In the final 3 months of 2019, total cru ...
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- Sree Jayajothi Cements Limited - India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Planning Commission, India
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
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