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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, 09 June 20
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KNOWLEDGE TO ELEVATE
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Tuesday, 09 June 20
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Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
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- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Central Electricity Authority - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Economic Council, Georgia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Malabar Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
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