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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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Monday, 21 October 19
SHIPPERS CHANGE COURSE AS FUEL RULES TARGET SULPHUR EMISSIONS - WOOD MACKENZIE
The International Maritime Organization (IMO), the industry’s regulator, will require all ships to reduce the level of sulphur in their engin ...
Monday, 21 October 19
COAL TO PLAY SIGNIFICANT ROLE IN SOUTH AFRICA POWER MIX - MINISTER, REUTERS REPORTED
South Africa’s plans for additional power generation over the next decade will involve a variety of energy sources, with coal still playing a ...
Monday, 21 October 19
ULTRAMAX: IN ASIA, TRIPS FROM THE SINGAPORE AREA WERE PAYING BETWEEN $14,000 AND $16,000, DEPENDING ON THE VESSEL SIZE AND DURATION - BALTIC BRIEFING
Capesize
The market traded in a relatively stable supported manner in the Pacific this week while the Atlantic experienced weakening turbulence ...
Friday, 18 October 19
WHY CRUDE TANKER RATES JUST FELL (HALFWAY) BACK TO EARTH - FREIGHT WAVES
Panic drove crude-tanker rates up, very briefly, to mind-bogglingly high assessed levels of around $300,000 per day. Now, the fear factor has been ...
Friday, 18 October 19
SHORT TERM STRENGTH FOR OZ COMMODITIES - BALTIC BRIEFING
Volatility in the global commodity markets is not expected to unduly rattle Australia’s commodity outlook through 2020, but the 2021 picture ...
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Showing 1306 to 1310 news of total 6871 |
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- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Minerals Council of Australia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Riau Bara Harum - Indonesia
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- IEA Clean Coal Centre - UK
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
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