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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, 12 April 16
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The Finance Ministry and the Directorate of Revenue Intelligence (DRI) of India are said to have stepped up investigations into the alleged over-in ...
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- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- The University of Queensland
- Port Waratah Coal Services - Australia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
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