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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, 31 July 18
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Saturday, 28 July 18
GOVERNMENT TO REVOKE COAL PRICE CAP POLICY - JP
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Thursday, 26 July 18
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Thursday, 26 July 18
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Wednesday, 25 July 18
COAL MINER BUKIT ASAM'S PROFIT GROWS 50% IN FIRST HALF - JP
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- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Minerals Council of Australia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Videocon Industries ltd - India
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
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