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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, 06 May 20
KOSPO INVITED COAL BIDS FOR LOW CALORIFIC VALUE COAL
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Wednesday, 06 May 20
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KNOWLEDGE TO ELEVATE
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IRON ORE TRADE REMAINS REMARKABLY RESILIENT THIS YEAR, AT LEAST IN ASIA - BANCHERO COSTA
Iron ore trade remains remarkably resilient this year, at least in Asia, despite the global economic impact from COVID-19. In the first 4 months of ...
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- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Economic Council, Georgia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
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