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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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Saturday, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
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Wednesday, 08 March 23
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Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- Singapore Mercantile Exchange
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- The University of Queensland
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Latin American Coal - Colombia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
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