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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, 31 July 18
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Saturday, 28 July 18
GOVERNMENT TO REVOKE COAL PRICE CAP POLICY - JP
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Thursday, 26 July 18
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Thursday, 26 July 18
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Wednesday, 25 July 18
COAL MINER BUKIT ASAM'S PROFIT GROWS 50% IN FIRST HALF - JP
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- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Australian Coal Association
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Larsen & Toubro Limited - India
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Tamil Nadu electricity Board
- White Energy Company Limited
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Planning Commission, India
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Marubeni Corporation - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Minerals Council of Australia
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- VISA Power Limited - India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
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