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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, 10 April 19
KOSPO INVITED BIDS FOR 160K MT OF MIN. 3700 NCV COAL FOR JUNE LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 160,000 MT of min. 3,800 Kcal/kg ~max.4,100 ...
Wednesday, 10 April 19
CHINA'S GROWING THERMAL COAL SUPPLY TO PRESSURE EXPORTERS - FITCH RATINGS
Growing Chinese thermal coal supply is likely to lead to further tightening of import controls by the government, putting pressure on seaborne coal ...
Wednesday, 10 April 19
SHIPPING MARKET INSIGHT - INTERMODAL
The tragedy in Brazil’s Vale Brumadinho where a tailings dam collapsed in January ranks among the world’s worst mining disasters. It co ...
Monday, 08 April 19
5TH INDIA NUCLEAR NEW BUILD CONGRESS 2019
5th India Nuclear New Build Congress 2019
The congress in Mumbai aims to bring together representatives from governments, regulators ...
Monday, 08 April 19
THERMAL COAL PRICES FALL, INDIAN POWER PLANTS TO SEE LIMITED GAINS - BUSINESS STANDARD
Thermal coal prices are on a downward spiral globally. Australian coal prices have fallen nearly 20 per cent in the past week, and 40 per cent from ...
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- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Central Electricity Authority - India
- The University of Queensland
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Ambuja Cements Ltd - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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