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