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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, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Planning Commission, India
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Parliament of New Zealand
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
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