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