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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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Friday, 25 April 14
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Friday, 25 April 14
2ND MYANMAR ELECTRIC POWER CONVENTION 2014 IS THE GATEWAY TO MYANMAR POWER INDUSTRY!
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Friday, 25 April 14
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Thursday, 24 April 14
HANDY : A FLOW OF FRESH REQUIREMENTS LIFTING THE PACIFIC SLOWLY TO US$ 10-11 K BSS SINGAPORE FOR COAL ROUNDS
Handy
There is still no place to hide in the Atlantic for the smaller but flexible sizes. Slow and weak seems to be the headlines, although th ...
Wednesday, 23 April 14
EUROPE WOULD BE HARD PRESSED TO REPLACE RUSSIAN GAS, FITCH RATINGS SAYS
A ban on Russian gas imports to the EU would cause substantial disruption to Europe's economy and industry, Fitch Ratings says. In the immed ...
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- MS Steel International - UAE
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Planning Commission, India
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- White Energy Company Limited
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- The University of Queensland
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
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