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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, 08 August 17
COAL SALES DESTINATION IS DOMINATED BY DEVELOPING COUNTRIES IN ASIA - ADARO
COALspot.com: Adaro Energy has produced 13.27 million tonnes of coal during the second quarter of 2017, from the mines PT Adaro Indonesia, PT Semes ...
Tuesday, 08 August 17
KOMIPO INVITES BIDS FOR 5200 AND 5700 NAR COAL FOR Q4 2017
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued an another new tender for 420,000 Metric Tons of Bituminous coal ...
Monday, 07 August 17
INDIA'S THERMAL COAL IMPORTS HAVE FALLEN BY 16% YEAR-ON-YEAR IN THE FIRST FIVE MONTHS OF THIS YEAR
COALspot.com: The second quarter of 2017 was characterized by volatility in the coal market driven by policy measures and weather disruptions say A ...
Monday, 07 August 17
BUMA SIGNED $385 MILLION WORTH OF NEW CONTRACT WITH PT PADA IDI
COALspot.com: PT Delta Dunia Makmur Tbk., has announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into min ...
Monday, 07 August 17
THE SHIPPING INDEXES BOUNCE BACK THIS PAST WEEK
COALspot.com: The Freight market rose this past week compared to the previous week, as BDI, Cape and Panamax indexes show a positive trend week ove ...
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Showing 1981 to 1985 news of total 6871 |
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- Directorate Of Revenue Intelligence - India
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- Formosa Plastics Group - Taiwan
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- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
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- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
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- Parliament of New Zealand
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- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Eastern Coal Council - USA
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- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
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- Karbindo Abesyapradhi - Indoneisa
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- Mjunction Services Limited - India
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- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
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- Deloitte Consulting - India
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- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
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- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
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- Metalloyd Limited - United Kingdom
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- Indian Energy Exchange, India
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- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
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- New Zealand Coal & Carbon
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- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
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- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
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- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Australian Coal Association
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- Central Electricity Authority - India
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- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
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- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Orica Mining Services - Indonesia
- Minerals Council of Australia
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- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
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- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Sical Logistics Limited - India
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- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
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- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
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- PetroVietnam Power Coal Import and Supply Company
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- Chamber of Mines of South Africa
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- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
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