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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 10
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Tuesday, 29 June 10
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Monday, 28 June 10
REVISIONS SHOULD AIM MINERAL AND COAL LAW
VIVAnews reported that, the Consortium of Mineral, Coal and Geothermal-Producing Regional Governments (Minerbapabum) is asking the government to per ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- The University of Queensland
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
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