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