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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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Tuesday, 30 November 99
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Showing 6871 to 6871 news of total 6871 |
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- Latin American Coal - Colombia
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- Ministry of Finance - Indonesia
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- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
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- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
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- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
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- Indian Oil Corporation Limited
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- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
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- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- The University of Queensland
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- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
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- Power Finance Corporation Ltd., India
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- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
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- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
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- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
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- Minerals Council of Australia
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- Orica Mining Services - Indonesia
- PTC India Limited - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
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- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
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- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
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- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
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- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
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- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
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- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
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- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- SN Aboitiz Power Inc, Philippines
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
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- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
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