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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, 22 December 19
NMDC DIVERSIFIES INTO COAL MINING - THE HINDU
Iron ore mining major NMDC has been allocated two coal blocks in Jharkhand for commercial mining by the Union Ministry of Coal.
Both ...
Sunday, 22 December 19
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Saturday, 21 December 19
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Friday, 20 December 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- PTC India Limited - India
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Romanian Commodities Exchange
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