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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, 17 August 18
MALAYSIA'S MANJUNG 4 - WORLD COAL ASSOCIATION
According to the IEA’s Energy Access Outlook 2017 report, nearly all of those who gained access to electricity worldwide in the last 16 years ...
Thursday, 16 August 18
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Indonesian coal production was recorded at 180 million tons on Wednesday, or 37.11 percent of the government’s 485 million target this year.
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Tuesday, 14 August 18
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Monday, 13 August 18
A 50,200 DWT FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA REDELIVERY CHINA IN THE LOW $10,000S - THE BALTIC BRIEFING
Capesize
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- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- The University of Queensland
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
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