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