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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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Thursday, 28 July 16
FITCH RAISES CORPORATE OIL PRICE ASSUMPTION FOR 2016 TO USD42
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Thursday, 28 July 16
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Tuesday, 26 July 16
NORTH P&I CLUB EXPLAINS HOW TO AVOID CLAIMS FOR SELF-COOKING SOYA BEANS
KNOWLEDGE TO ELEVATE
North P&I Club has advised its members to be extra vigilant during loading and transport of soya beans to ensure they ...
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- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- The University of Queensland
- Planning Commission, India
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
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