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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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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Australian Coal Association
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
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