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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, 31 October 17
BALTIC DRY INDEX TAKES A BREAK FROM ITS UPWARD RALLY COURSE - GEORGE LAZARIDIS
It has been a week of corrections for the dry bulk freight market as it seems as the general Baltic Dry Index takes a break from its upward rally c ...
Friday, 27 October 17
U.S WEEKLY COAL PRODUCTION FLAT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.9 million short tons ...
Thursday, 26 October 17
CYBER COVER FOR E-BILLS - PHILIP STEPHENSON
KNOWLEDGE TO ELEVATE
Increasingly popular electronic bills of lading are, by their nature, susceptible to the risk of cyber attack. Here, Stan ...
Thursday, 26 October 17
INDO TO CHINA ROUNDS SUPRAS ACHIEVING AROUND HIGH $14000 - FEARNLEYS
Supramax
By mid-week the market has been relatively quiet in the Pacific basin as well, but still some healthy rates being achieved on the differ ...
Thursday, 26 October 17
STRONG SIGNAL FOR AUSTRALIAN COAL DEMAND - GREG EVANS
The International Energy Agency’s Southeast Asia Energy Outlook report, released today, presents a positive outlook for Australian coal produ ...
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Showing 1901 to 1905 news of total 6871 |
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- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Australian Coal Association
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- The University of Queensland
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Parliament of New Zealand
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
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