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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, 02 December 22
INDONESIAN COAL PRICE REFERENCE PLUNGE TOWARD US$ 281.48 A TON AS DEMAND DROPS WORLDWIDE
COALspot.com: The cost of coal is falling so fast that it is beginning to put real money back in the pockets of end-users.
Indonesia ...
Wednesday, 30 November 22
INDONESIA’S BUMI RESOURCES TARGETS 2023 COAL OUTPUT OF 80 MLN TONNES - REUTERS
Indonesian coal miner PT Bumi Resources Tbk BUMI.JKis eyeing a 10% increase in output to 80 million tonnes next year amid expectations for more fav ...
Wednesday, 30 November 22
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Tuesday, 29 November 22
INDIA TO RECEIVE FIRST LNG CARGO FROM INDONESIA’S TANGGUH LNG - REUTERS
India will receive its first cargo from Indonesia’s Tangguh liquefied natural gas (LNG) plant at the Dahej terminal on Monday, according to a ...
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- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Tata Chemicals Ltd - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
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