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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 ...
Monday, 01 June 20
SUPRAMAX: IN SOUTH EAST ASIA RATES TRADED SIDEWAYS - BALTIC BRIEFING
Capesize
A sober end to the week, with the market seemingly ready for the weekend. After a steady week of rate declines a small flurry of Atlan ...
Friday, 29 May 20
COVID-19: COAL SUPPLY BY CIL TO POWER SECTOR DIPS 22% TO 32 MT IN APRIL DUE TO DEMAND SLUMP - PTI
Over 95% of CIL’s production comes from its 171 open cast mines.
The supply of coal to the power sector by state-owned Coal In ...
Friday, 29 May 20
AUSTRALIA'S NEW HOPE WARNS OF HIT FROM COAL PRICE SLUMP - REUTERS
Australia’s New Hope Corp Ltd said on Thursday that a sudden drop in thermal coal prices and lower output from its Queensland operations woul ...
Friday, 29 May 20
GOVT MAY LAUNCH COAL BLOCKS AUCTION PROCESS UNDER COMMERCIAL MINING ON JUN 11 - PTI
The Centre is likely to launch the process of coal blocks auction under commercial mining on June 11 and around 50 mines are expected to go under t ...
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- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Simpson Spence & Young - Indonesia
- Australian Coal Association
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Minerals Council of Australia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- White Energy Company Limited
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
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