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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, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
Tuesday, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
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- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- The University of Queensland
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Posco Energy - South Korea
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
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