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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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Tuesday, 30 November 99
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Showing 6871 to 6871 news of total 6871 |
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- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Planning Commission, India
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- London Commodity Brokers - England
- Minerals Council of Australia
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
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