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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, 04 March 20
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CHINA PROVINCE TO CLOSE 10 MLN TONNES OF COAL CAPACITY IN 2020 - XINHUA
Southwest China’s Guizhou Province plans to phase out 10 million tonnes of outdated coal production capacity by closing 80 coal mines in 2020 ...
Wednesday, 04 March 20
UKRAINE PRODUCED OVER 2.55 MLN TONNES OF COAL IN FEBRUARY - UKRINFORM
In February 2020, Ukraine produced over 2.55 million tonnes of coal, which is 0.2% less than planned.
The Coal Miners Union of Ukrai ...
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- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
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