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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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Monday, 17 September 18
GLENCORE RETURNS TO JAPAN COAL TALKS SCUPPERED BY HIGH PRICES - BLOOMBERG
Mining giant Glencore Plc and Japanese utilities have resumed thermal coal supply negotiations, restarting talks that fell apart earlier this year ...
Monday, 17 September 18
SMALL PERCENTAGE OF THE WORLD FLEET WILL FIT SCRUBBERS - FORECASTS : METTE KRONHOLM FRAENDE
In recent months, there have been numerous reports of a strong pick-up in demand for scrubbers. On 1 January 2020, however, the number of ships fit ...
Saturday, 15 September 18
POWERING SUSTAINABLE DEVELOPMENT WITH LOW EMISSION COAL TECHNOLOGIES - WCA
In its 5th Strategic Energy Plan this year (2018), the Japanese Cabinet recognised coal as an important energy resource, necessary for the country& ...
Friday, 14 September 18
10 YEARS ON FROM LEHMAN, HOW IS SHIPPING'S "HANGOVER"? - CLARKSONS RESEARCH
On 15th September 2008, the collapse of Lehman Brothers crystallised the financial crisis and the onset the worst economic downturn for a century. ...
Thursday, 13 September 18
OPEC SEES SLOWER 2019 OIL DEMAND GROWTH, WARNS ON ECONOMY
Crude Oil Price Movements
In August, the OPEC Reference Basket declined by $1.01 m-o-m, settling at $72.26/b. Crude oil futures were also down ...
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- The University of Queensland
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- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
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- Ministry of Finance - Indonesia
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- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
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- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
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- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
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- Independent Power Producers Association of India
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- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
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- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Planning Commission, India
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
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- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
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