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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, 18 December 18
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Tuesday, 18 December 18
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Monday, 17 December 18
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Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
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- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
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