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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, 13 March 20
PANAMAX: SLIGHTLY STRONGER NUMBERS IN BOTH BASINS THIS WEEK - FEARNLEYS
Cape
Still very sad times for the big ships, and merit in further trading at present levels is highly debatable for most tonnage. Spot fixtures ...
Friday, 13 March 20
TOP 4 ACCOUNTING CONSIDERATIONS AFTER THE IMPLEMENTATION OF IMO 2020 - PWC
To install or not to install?
Following the IMO 2020 global low sulphur cap for marine fuel effective since 1 January 2020, many shi ...
Friday, 13 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Friday, 13 March 20
KOREA SOUTH-EAST POWER INVITED BIDS FOR 390,000 MT OF THERMAL COAL FOR MAY-JUNE 2020 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), has issued an international tender for total 390,000 Metric Tons of coal for May & June ...
Thursday, 12 March 20
INDIA 2019 THERMAL COAL IMPORTS RISE 12.6% TO NEARLY 200 MILLION TONNES - REUTERS
India’s thermal coal imports rose 12.6% to nearly 200 million tonnes in 2019, government data reviewed by Reuters showed, reflecting the seco ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- The University of Queensland
- Lanco Infratech Ltd - India
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
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