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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, 07 November 17
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According to Business Standard an I ...
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- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Planning Commission, India
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- PTC India Limited - India
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
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