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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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Sunday, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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Showing 106 to 110 news of total 6871 |
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- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- White Energy Company Limited
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Australian Coal Association
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- The University of Queensland
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Planning Commission, India
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
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