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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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Thursday, 30 June 22
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Thursday, 30 June 22
DIVERGENCE BETWEEN HIGH- AND LOW-GRADE THERMAL COAL PRICES IN APAC TO NARROW - FITCH RATINGS
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- Economic Council, Georgia
- Tamil Nadu electricity Board
- Australian Coal Association
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Planning Commission, India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
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