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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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Tuesday, 30 November 99
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Showing 6871 to 6871 news of total 6871 |
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- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
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