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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, 29 November 17
THERMAL COAL MARKETS WERE A LITTLE BIT MORE SUBDUED - DANIEL HYNES, ANZ
Coal prices were stronger, led by gains in coking coal. Premium hard coking coal jumped above USD200/t for the first time in two months, said Danie ...
Wednesday, 29 November 17
SHIPPING MARKET INSIGHT - VASILIS MOIRIS
In line with most expectations for the end of this month, during the past days the Dry Bulk market realized a significant rebound that sent the BDI ...
Tuesday, 28 November 17
THE DRY BULK MARKET HAS SHOWN A REMARKABLE RECOVERY THIS YEAR - GEORGE LAZARIDIS
The Dry Bulk market has shown a remarkable recovery this year with the average earnings having increased by around 63% this year so far compared to ...
Friday, 24 November 17
U.S. PRODUCED 14.9 MMST FOR THE WEEK ENDING NOV 18; UP 0.9% W/W - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.9 million short ton ...
Thursday, 23 November 17
PANAMAX: ANOTHER SLOW AND UNEVENTFUL WEEK; DECREASING FREIGHT RATES IN BOTH HEMISPHERES - FEARNLEYS
Supramax
A quiet start to the week. USG closed last week a bit tighter, and continued into the new week on a positive tone with little concluded, ...
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Showing 1866 to 1870 news of total 6871 |
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- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Antam Resourcindo - Indonesia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Interocean Group of Companies - India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
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