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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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Thursday, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
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