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