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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, 16 May 16
THE FREIGHT MARKET WAS WEAK AND ALL SEGMENTS EXCEPT PANAMAX WERE DOWN
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 13 May 16
COAL CARGOES - SOME RECENT DEVELOPMENTS: SWEDISH CLUB
KNOWLEDGE TO ELEVATE
Indonesia continues to be amongst the world’s major exporters of coal, some 426Mt being traded in 2013 mostly to In ...
Friday, 13 May 16
US WEEKLY COAL PRODUCTION IS RUNNING 33% BELOW THE SAME PERIOD IN 2015 - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.9 million short tons (mm ...
Friday, 13 May 16
DRY BULK SHIPPING MARKET RECOVERY WILL BE A LONG, HARD-FOUGHT BATTLE - HELLENIC SHIPPING NEWS
Anyone who expects a strong rally in dry bulk market rates to end the industry’s downturn will be bitterly disappointed. By contrast – ...
Wednesday, 11 May 16
U.S. FORECAST COAL PRODUCTION IS EXPECTED TO DECLINED BY 150 MMST IN 2016; THE LARGEST DECLINE SINCE 1949 - EIA
COALspot.com: EIA estimates that U.S. coal production in April was 46 million short tons (MMst), a 6 MMst (12%) decrease from the previous month an ...
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Showing 2436 to 2440 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- VISA Power Limited - India
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Aditya Birla Group - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
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