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