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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, 03 June 09
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IPL-2 OVER, INDIAN COAL LEAGUE BEGINS IN SOUTH AFRICA - ECONOMICTIME
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- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- The University of Queensland
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Planning Commission, India
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
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