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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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Monday, 24 June 24
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The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
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Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
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Thursday, 13 June 24
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- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Central Electricity Authority - India
- India Bulls Power Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
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