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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, 22 March 24
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Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
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Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
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Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
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- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Bhatia International Limited - India
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Mjunction Services Limited - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
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