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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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Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
Monday, 25 May 20
NON-OPEC OIL SUPPLY DEVELOPMENT - OPEC
Non-OPEC oil supply continued to increase by 2.0 mb/d in 2019, driven by US shale production, which rose by 1.7 mb/d, amounting to 84% of total non ...
Sunday, 24 May 20
A 63,000 FIXED DELIVERY VIETNAM TRIP VIA INDONESIA REDELIVERY KOSICHANG AT $8,500 - BALTIC BRIEFING
Capesize
After a week of bounce momentum the market appears to have stalled out once again. The Capesize 5TC has more than doubled since last F ...
Saturday, 23 May 20
COLOMBIA COAL OUTPUT DOWN 7.2% IN Q1 ON LOW PRICES, CORONAVIRUS LOCKDOWN - REUTERS
Coal production in Colombia, the world’s fifth-largest coal exporter, fell 7.2% in the first quarter because of low prices and coronavirus qu ...
Saturday, 23 May 20
EWP INVITES BIDS FOR 840,000 METRIC TONS OF MIN 5700 NAR COAL
COALspot.com: South Korea’s Korea East-West Power Co. Ltd (EWP) has Issued an International Tender for total Max 840,000 Metric Tons of min 5 ...
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- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- The University of Queensland
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
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