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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, 25 October 21
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Monday, 25 October 21
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Monday, 25 October 21
CHINA COAL PRICES MARK WORST WEEK SINCE MAY ON GOVERNMENT INTERVENTION - REUTERS
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Friday, 22 October 21
THE BIG PICTURE: ENERGY MARKETS - BREAK WAVE ADVISORS
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- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Parliament of New Zealand
- Mercator Lines Limited - India
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Australian Coal Association
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
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