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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, 12 August 20
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Wednesday, 12 August 20
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EIA expec ...
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Global Energy Monitor’s latest Global Coal Plant Tracker has put another nail in the coffin for the coal-carrying fleet with its finding that ...
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- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- The University of Queensland
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
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