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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, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
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- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
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- India Bulls Power Limited - India
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- The State Trading Corporation of India Ltd
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- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Marubeni Corporation - India
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
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