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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, 30 June 21
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Saturday, 26 June 21
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Coal prices have climbed to their highest lev ...
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- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Planning Commission, India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- PNOC Exploration Corporation - Philippines
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Siam City Cement - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
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