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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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Friday, 10 October 14
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The government is planning to launch a program to develop the downstream coal industry to increase the commodity’s added value, an official h ...
Friday, 10 October 14
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Wednesday, 08 October 14
CAPES RATE FOR THE W. AUSTRALIA TO CHINA VOYAGE MOVED TO BELOW $8/MT - INTERMODAL
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- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
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- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
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- Global Business Power Corporation, Philippines
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- Heidelberg Cement - Germany
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- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
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- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
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- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
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- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
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- Independent Power Producers Association of India
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- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
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- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
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- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
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- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
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- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
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