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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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Thursday, 24 March 16
NEWBUILDINGS' PRICES HAVE STARTED TO COME DOWN - ALLIED | HELLENIC SHIPPING NEWS
Newbuildings’ prices have started to come down, as demand has remained subdued for quite some time now. In its latest weekly report, shipbrok ...
Wednesday, 23 March 16
THE PANAMA CANAL - WILL THE MELTING OF POLAR ICE CAPS CREATE RIVAL NAVIGATIONAL WATERWAYS THROUGH THE ARCTIC? - INTERMODAL
The Panama Canal, 102 years after its initial opening, is now about to have its expansion completed with a cost of USD5.25 Billion. It is a project ...
Tuesday, 22 March 16
FOUR NEW MARKET MEMBERS HAVE JOINED GLOBALCOAL
globalCOAL® announced yesterday that four new Market Members have joined its international trading community.
Ferrocadia DMCC is an intern ...
Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.21 percent week over week to averaging $38.90 per ton on this past Friday, ac ...
Monday, 21 March 16
THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
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Showing 2511 to 2515 news of total 6871 |
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- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Marubeni Corporation - India
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Minerals Council of Australia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
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