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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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Friday, 29 May 20
KOMIPO ON BEHALF FIVE KOREAN GENCOS INVITED COAL BIDS FOR 5,700 & 4999 NCV COAL FOR AUGUST 2020 LOADING
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OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
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MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
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- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Australian Coal Association
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
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