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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, 12 February 20
COAL INDIA WILL EXCEED LAST YEAR'S PRODUCTION FIGURES: OFFICIAL - PTI
Despite coal production being hampered at Dipka mines due to prolonged rains, Coal India Ltd will exceed last year’s production figures, a to ...
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THE SHIPPING INDUSTRY SEES FREIGHT MARKETS IN A COMPLETE STATE OF COLLAPSE AS DEMAND GETS PARALYZED DUE TO CORONAVIRUS OUTBREAK - ALLIED
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WORLD STEEL PRODUCTION IN 2019 - BANCHERO COSTA
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- Indonesian Coal Mining Association
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- The University of Queensland
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
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