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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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Tuesday, 18 December 18
COAL OUTLOOK BULLISH DESPITE WEAK CHINESE IMPORT DATA - HEREN, ICIS
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Tuesday, 18 December 18
TOBA BARA ACQUIRES SHARES OF PT BATU HITAM PERKASA
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SUPRAMAX THERE WAS STRONGER DEMAND FROM SOUTHEAST ASIA, WITH MORE COAL BEING SHIPPED - BALTIC BRIEFING
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Monday, 17 December 18
SOUTH KOREA STATE-OWNED UTILITY KOREA EAST-WEST POWER CO. LTD ISSUED A TENDER FOR MAX 3.220 MILLION TONS OF 4200 TO 5900 NAR COAL
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Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operat ...
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- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Neyveli Lignite Corporation Ltd, - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- The University of Queensland
- Australian Coal Association
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Economic Council, Georgia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
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