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