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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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Wednesday, 02 February 22
COAL STORAGE IN CHINA’S POWER PLANTS NEAR RECORD HIGHS - XINHUA
Coal inflows into China’s power plants have picked up, bringing their coal storage to near record highs, the National Development and Reform ...
Wednesday, 02 February 22
MARKET INSIGHT - INTERMODAL
Oil prices have rallied to the highest level since October 2014 breaking above $90/bbl recently. November 2014 was the point when OPEC unleashed pr ...
Monday, 31 January 22
HOW INDONESIA'S COAL EXPORT BAN COULD IMPACT INDIA - IEEFA
What does it mean for power generation and energy security?
Not long ago, India faced coal shortages due to a decline in domestic co ...
Sunday, 30 January 22
AIR PRODUCTS' COAL GASIFICATION PROPOSAL TRIGGERS LOOMING POLICY DISPUTES IN INDONESIA - IEEFA
Plan to substitute Indonesia’s LPG imports with dimethyl ether may be hard to realize due to conflicting business interests
In ...
Sunday, 30 January 22
ENDGAME FOR NEW COAL POWER PROJECTS? - IEEFA INDIA
Retired coal units must be replaced only by assets that can provide grid flexibility
Reportedly, an expert committee appointed by th ...
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Showing 361 to 365 news of total 6871 |
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- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Planning Commission, India
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Eastern Energy - Thailand
- The University of Queensland
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Agrawal Coal Company - India
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