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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, 16 January 21
SEABORNE TRADE IN STEAM COAL DECREASED BY 11.6% FROM 937 MILLION TONNES IN 2019 TO 828 MILLION TONNES IN 2020 - COAL IMPORTERS ASSOCIATION, GERMANY
According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), global hard coal production dec ...
Friday, 15 January 21
OVER US$50 BILLION IN GAS POWER PROJECTS AND LNG IMPORT FACILITIES AT RISK OF CANCELLATION IN BANGLADESH, PAKISTAN AND VIETNAM - IEEFA
Pakistan and Bangladesh have already cancelled tenders for LNG imports
Emerging markets such as Vietnam, Pakistan and Bangladesh tha ...
Friday, 15 January 21
VIETNAM'S EXTRAORDINARY ROOFTOP SOLAR SUCCESS DEALS ANOTHER BLOW TO THE REMAINING COAL PIPELINE - IEEFA
9.3 gigawatts peak of solar capacity, equal to 6 coal power plants, installed in less than a year
Vietnam’s solar power indust ...
Friday, 15 January 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 14 January 21
KOREA MIDLAND POWER INVITED BIDS FOR AUSTRALIAN COAL FOR THREE YEARS SUPPLY
COALspot.com: Korea Midland Power Co. Ltd, issued an International tender for total 1,560,000 MT of Min.5,700 kcal/kg NCV coal of Australian Origin ...
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- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- SMC Global Power, Philippines
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Deloitte Consulting - India
- The University of Queensland
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Planning Commission, India
- Essar Steel Hazira Ltd - India
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