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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- White Energy Company Limited
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
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