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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, 01 November 21
COAL PRICES HAVE FURTHER ROOM TO DROP: TOP ECONOMIC PLANNER - GLOBAL TIMES
China’s top economic planner said coal prices have further room to drop on Friday, as the most traded coal futures dropped to below 1,000 yua ...
Saturday, 30 October 21
CHINA'S COAL PRICES SEE BIGGEST WEEKLY FALL IN MORE THAN 5 YEARS - REUTERS
China’s coal futures prices saw their biggest fall in more than five years after the powerful state planner said there is still room to adjus ...
Saturday, 30 October 21
G-20 LEADERS PREPARE STATEMENT TO STOP FUNDING FOREIGN COAL PLANTS - BLOOMBERG
Leaders of the Group of 20 wealthy economies are preparing to pledge to stop funding foreign coal-fired plants, but are still wrangling over climat ...
Friday, 29 October 21
APAC THERMAL COAL SUPPLY TO REMAIN TIGHT AS WINTER LOOMS - FITCH RATINGS
APAC thermal coal prices have surged, hitting historically high levels. The benchmark Newcastle 6,000kcal/kg grade coal reached USD228/tonne in mid ...
Thursday, 28 October 21
CANADA BAN ON SHIPPING COAL WOULD EQUAL SCRAPPING AS MANY AS 3 MILLION CARS - IEEFA
Canada ban on shipping coal would equal scrapping as many as 3 million cars
Change in Canadian policy could have major implications ...
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- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- PTC India Limited - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
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