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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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Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
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Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
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Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
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- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- White Energy Company Limited
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
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