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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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Wednesday, 16 December 20
CHINA TO BOOST DOMESTIC SUPPLY - FITCH
China’s benchmark Qinhuangdao 5,500kcal/kg coal price rose above the government’s upper yellow interval of CNY600/tonne in early Octobe ...
Wednesday, 16 December 20
INDONESIAN COAL RECOVERING - FITCH
Commenting on Indonesian coal, Fitch Ratings, the Indonesian 4,200 kcal index has begun to recover, improving to over USD 29 in November compared t ...
Tuesday, 15 December 20
NEWCASTLE PRICES RECOVER - FITCH
Prices for the benchmark Newcastle 6,000 kcal/kg grade coal have rebounded to over USD 70/tonne since late November as major Asian economies ease l ...
Tuesday, 15 December 20
APAC COAL PRICES REBOUND ON IMPROVED DEMAND AND SUPPLY CUTS - FITCH RATINGS
Prices for the benchmark Newcastle 6,000kcal/kg grade coal have rebounded to over USD70/tonne since late November as major Asian economies ease loc ...
Tuesday, 15 December 20
CHINA EXTENDS FULL OPEN GESTURE TO IMPORTED COAL EXCEPT FOR AUSTRALIA - GLOBAL TIMES
Domestic, overseas suppliers will take up share with easier clearance
China's top economic planner on Saturday gave approval to ...
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Showing 706 to 710 news of total 6871 |
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- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- The University of Queensland
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
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