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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
US PRODUCED APPROXIMATELY 19 MILLION SHORT TONS OF COAL IN A WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.0 million short tons (mmst) of coal i ...
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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- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
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