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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, 27 May 21
KOMIPO INVITED BIDS FOR 1.56 MILLION TONS OF BITUMINOUS COAL
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 ...
Thursday, 27 May 21
CHINA POWER DEMAND EXCEEDS PRE-COVID-19 LEVELS; THERMAL OUTPUT STRONG - FITCH RATINGS
Rising Consumption: Total power consumption rose by 21.2% yoy to 1,921.9GWh in 1Q21 due to the fast recovery of China’s economy, after a drop ...
Thursday, 27 May 21
CHINA'S POWER DEMAND EXCEEDS PRE-PANDEMIC LEVELS; RENEWABLES TO DRIVE DEVELOPMENT - FITCH RATINGS
China's power consumption exceeded the pre-Covid-19 levels in 1Q21 due to the country's fast economic recovery, with strong output from the ...
Wednesday, 26 May 21
THE INDONESIA COAL PRICE REFERENCE FOR MAY 2021 SETTLES AT US$ 89.74 PER TON
COALspot.com: The Indonesia coal price reference for May 2021 settles at US$ 89.74 per ton FOB vessel.
The Indonesia coal pric ...
Wednesday, 26 May 21
MARKET INSIGHT - INTERMODAL
Last year crude tankers’ newbuilding contracting activity was devastated by the economic effects of the Covid-19 pandemic and the cloud of un ...
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- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Vedanta Resources Plc - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- McConnell Dowell - Australia
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- Australian Coal Association
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
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- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
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