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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, 30 June 21
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Saturday, 26 June 21
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Coal prices have climbed to their highest lev ...
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- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
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