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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, 24 February 21
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Sunday, 21 February 21
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Sunday, 21 February 21
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Shifting away from coal is not only desirable, but absolutely necessary in these times.
In spite of being detrimental to environment ...
Wednesday, 17 February 21
STRANDED ASSETS A LONG-TERM RISK FOR MAJOR FOSSIL FUEL EXPORTERS - FITCH RATINGS
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Friday, 12 February 21
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Wind energy growth due to geography, design factors, and new installations
Wind surpassed coal as the primary power generation sourc ...
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- Romanian Commodities Exchange
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- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
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- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Directorate General of MIneral and Coal - Indonesia
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- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Indian Oil Corporation Limited
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- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Marubeni Corporation - India
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- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
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- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- White Energy Company Limited
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
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- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
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- Chamber of Mines of South Africa
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