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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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Showing 31 to 35 news of total 6871 |
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- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Indian Oil Corporation Limited
- The University of Queensland
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
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