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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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Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
Friday, 14 August 20
EIA: COAL PLANTS UNECONOMICAL IN MOST REGIONS - IEEFA
U.S. coal power generation plunged by 30 percent in the first half of 2020 off an already-depressed base, shoved out by natural gas and renewables ...
Thursday, 13 August 20
INDIA SHOULD RECORD A SLIGHT DECREASE IN THERMAL COAL IMPORTS, REACHING A VOLUME OF 167 MILLION TONS BY THE END OF 2020 - ASSOCARBONI
Regarding 2020 thermal coal imports forecasts, Vietnam’s coal imports showed a very strong growth in the first half of 2020 and it is believe ...
Thursday, 13 August 20
INDONESIA REMAINS THE LARGEST EXPORTER OF COAL IN THE WORLD - ASSOCARBONI
According to the last Assocarboni data for 2019, Indonesia remains the largest exporter in the world. Thermal coal exports have in fact reached 456 ...
Wednesday, 12 August 20
VIETNAM WAS THE PROTAGONIST OF A SIGNIFICANT INCREASE IN COAL IMPORTS IN 2019 - ASSOCARBONI
The latest Assocarboni data for 2019 also provide a detailed picture on the trend of the global coal import.
According to Assocarbon ...
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- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Minerals Council of Australia
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Australian Coal Association
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Tamil Nadu electricity Board
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
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