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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
BUMA SIGNED MINING AGREEMENT WITH ADARO
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into an agreement for the p ...
Wednesday, 30 June 21
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Sunday, 27 June 21
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Saturday, 26 June 21
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Rebounding electricity usage and scanty rainfall in China have added fuel to the rally
Coal prices have climbed to their highest lev ...
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- Kobexindo Tractors - Indoneisa
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- Coal and Oil Company - UAE
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- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Tamil Nadu electricity Board
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
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- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
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