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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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Wednesday, 13 January 21
CHINA THERMAL GENCO PROFITS FACE PRESSURE AMID POWER SHORTAGES - FITHCH WIRE
High coal and gas prices will put near-term pressure on margins for thermal power generators in China, says Fitch Ratings. However, the power short ...
Wednesday, 13 January 21
COAL TO BE BIGGEST CONTRIBUTOR TO INDIA'S $5 TRILLION ECONOMY: AMIT SHAH - BUSINESS STANDARD
The Centre on Monday awarded the letter of allocation to successful bidders of coal mines under the commercial auction held during October-November ...
Monday, 11 January 21
MUTED COAL RECOVERY IN 2021 - BALTIC EXCHANGE
Coal demand is expected to rebound in 2021
Medium-term outlook is less favourable although demand declines are expected to be subtle ...
Sunday, 10 January 21
KOREAN GENCOS INVITED BIDS FOR TOTAL 880,000 TONS OF COAL FOR MARCH 2021 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), on behalf of EWP, KOSPO, KOSEP and KOWEPO issued an international tender for total 880 ...
Friday, 08 January 21
INDIA COULD COMPETE AGAINST CHINA IN SOLAR MODULE PRODUCTION WITH THE RIGHT GOVERNMENT SUPPORT - IEEFA
The focus should be on helping manufacturers become globally competitive
Although one of the top 10 solar module producers in the world, India ...
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- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
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