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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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Friday, 24 July 20
IPA: THERMAL COAL IMPORTS AT MAJOR PORTS DECLINE 35 PC TO 17.71 MT IN APR TO JUNE - ECONOMIC TIMES
These ports had handled 27.13 MT of thermal coal and 14.95 MT of coking coal in the April-June period of the previous financial year
...
Thursday, 23 July 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 1.36 MILLION TONS OF BITUMINOUS COAL FOR OCTOBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 1,360,00 ...
Wednesday, 22 July 20
CIL'S COAL SUPPLY TO POWER SECTOR DROPS OVER 21% TO 93.5 MT IN APR-JUN QUARTER - PTI
The supply of coal by state-owned Coal India Ltd to the power sector fell 21.7 percent to 93.5 million tonnes (MT) in the first quarter of the ongo ...
Monday, 20 July 20
KOREA MIDLAND POWER INVITED BIDS FOR TOTAL 2.520 MILLION MT OF BITUMINOUS COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO), has issued an international tender for total 840,000 of Bituminous Coal to be used at Bo ...
Monday, 20 July 20
CHINA'S JUNE COAL OUTPUT FALLS 1.2% YEAR-ON-YEAR OVER ILLEGAL MINING CHECKS - REUTERS
China’s coal output dropped 1.2% in June on the year to 330 million tonnes, official data showed, as major coal mining areas cracked down on ...
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- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Posco Energy - South Korea
- White Energy Company Limited
- Attock Cement Pakistan Limited
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Indian Energy Exchange, India
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