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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
We expect global coal demand to fall by 8% in Q1 2020 relative to Q1 2019. This significant drop was driven by lower demand in the electricity sect ...
Friday, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
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Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
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Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
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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- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
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