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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, 26 November 10
INDIA WILL IMPORT 100 MLN TONS OF COAL BY 2012 - LAKSHMINARAYANA
COALspot.com – “India’s coal shortfall will reach 100 million mt by 2011-12”, said Lakshminarayana, Vice Preside ...
Friday, 26 November 10
CHINAS COAL INVENTORY STAYS HIGH FOR 22 MONTHS AT 220 MLN T, ASSOCIATION
Xinhua News Agency reported that, China’s coal inventory has stayed high and unchanged for 22 months to be around 220 million tonnes, reflecti ...
Friday, 26 November 10
DR WOLFGANG CIESLIK TO HEAD GERMAN COAL IMPORTERS ASSOCIATION
COALspot.com – (Press Release): The Management Board of the German Coal Importers Association (Verein der Kohlenimporteure e.V.) has elected D ...
Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal pric ...
Thursday, 25 November 10
INDONESIAN ROUNDS ARE ACHIEVING IN THE LOW 10S, OWNERS ARE NOT KEEN FOR TRIPS TO INDIA - FEARNBULK
HANDY
Uneventful week - Supra/Panamax stems ex USG to China/Korea/Japan are the main focus + grains ex. Argentina. The Atlantic market activity re ...
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Showing 5511 to 5515 news of total 6871 |
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- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- The University of Queensland
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Formosa Plastics Group - Taiwan
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
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