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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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Sunday, 29 December 19
AUSTRALIA SUFFERS WORST OF CHINA'S COAL CURBS AFTER EARLIER BOOM - BLOOMBERG
Australia is bearing the brunt of China’s year-end coal import restrictions, ceding market share to other exporters including Russia and Mong ...
Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
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Showing 1221 to 1225 news of total 6871 |
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- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Energy - Thailand
- London Commodity Brokers - England
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Eastern Coal Council - USA
- The University of Queensland
- Uttam Galva Steels Limited - India
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mjunction Services Limited - India
- Australian Coal Association
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
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