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