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