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