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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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Thursday, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
Thursday, 10 June 21
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EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
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Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
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- SMG Consultants - Indonesia
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- The State Trading Corporation of India Ltd
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- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Australian Coal Association
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
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- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
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- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
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