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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, 12 February 20
COAL INDIA WILL EXCEED LAST YEAR'S PRODUCTION FIGURES: OFFICIAL - PTI
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- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- The University of Queensland
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
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