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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, 18 December 18
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Tuesday, 18 December 18
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Saturday, 15 December 18
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- Oldendorff Carriers - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- The University of Queensland
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
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