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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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Friday, 12 April 19
OFFSHORE MENA CONGRESS 2019
Offshore MENA Congress 2019
Event Date : 11-12th Jun. 2019
Location : Cairo, Egypt
Offshore MENA Congress 2019 Offshor ...
Friday, 12 April 19
U.S : MORE THAN 7 GW OF COAL-FIRED GENERATION IS SCHEDULED TO RETIRE BY THE END OF 2020 - EIA
EIA estimates that U.S. coal production decreased by 19 million short tons (MMst) (2%) in 2018, totaling 756 MMst.
EIA also expects ...
Friday, 12 April 19
GLENCORE WINS $520 MILLION DEAL TO SELL COAL TO MEXICO - REUTERS
Global trader Glencore has won contracts worth around $520 million to supply 4.94 million tonnes of coal to Mexico, state-run power utility the Fed ...
Thursday, 11 April 19
AUSTRALIAN COAL IN THE FRONTLINE OF CHINA'S SUPPLY GLUT - AUSTRALIAN FINANCIAL REVIEW
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Wednesday, 10 April 19
COALTRANS ASIA - TAKE PART IN THE LARGEST COAL EVENT IN THE WORLD!
Take part in the largest coal event in the world!
Coaltrans Asia is back this June bringing together the entire international coal s ...
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- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- The University of Queensland
- Planning Commission, India
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- MS Steel International - UAE
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
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