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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, 22 December 19
NMDC DIVERSIFIES INTO COAL MINING - THE HINDU
Iron ore mining major NMDC has been allocated two coal blocks in Jharkhand for commercial mining by the Union Ministry of Coal.
Both ...
Sunday, 22 December 19
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Saturday, 21 December 19
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Friday, 20 December 19
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
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