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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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Showing 2001 to 2005 news of total 6871 |
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- Trasteel International SA, Italy
- Australian Coal Association
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- GVK Power & Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- The University of Queensland
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
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