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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, 25 September 18
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Coal prices are not supposed to be rising as governments tighten environmental controls but that’s precisely what is happening at the premium ...
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Saturday, 22 September 18
FITCH RATINGS: WORLD GROWTH FORECAST CUT ON US-CHINA TRADE BATTLE
Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook, with th ...
Tuesday, 18 September 18
COOLING OUTLOOK FOR COAL - KATE JONES
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Showing 1611 to 1615 news of total 6871 |
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- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Vedanta Resources Plc - India
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- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
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- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Simpson Spence & Young - Indonesia
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- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
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- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
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- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
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- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
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