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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, 01 May 20
GLOBAL COAL DEMAND TO FALL BY 8% IN Q1 2020 RELATIVE TO Q1 2019 - IEA
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Friday, 01 May 20
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Wednesday, 29 April 20
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Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
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A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
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- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
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