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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, 18 March 20
SHIPPING MARKET INSIGHT - INTERMODAL
Despite we all knew about the Covid-19 weeks ago, few could realize the size of the thread until the last few days. The examples of China and Italy ...
Tuesday, 17 March 20
IT IS NOW UNQUESTIONABLE THAT 2020 WILL BE A MILESTONE YEAR FOR THE OIL MARKET, AS WELL AS THE WHOLE GLOBAL ECONOMY - ALLIED
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Tuesday, 17 March 20
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Monday, 16 March 20
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Capesize
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Sunday, 15 March 20
CAPTIVE COAL OUTPUT RISES 19% IN APRIL-FEBRUARY - FINANCIAL EXPRESS
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- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Australian Coal Association
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Jindal Steel & Power Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
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