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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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Sunday, 10 January 16
LNG BUNKERING IN ASIA: FUELING A PROMISING FUTURE? - REED SMITH
The requirement of a mandatory reduction of sulphur content in bunker fuel proposed by the International Maritime Organisation (IMO) poses a challe ...
Saturday, 09 January 16
BALTIC DRY INDEX SINKS 10% WEEK OVER WEEK TO AN ALL-TIME LOW OF 429 POINTS
COALspot.com: The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, decline around 10% we ...
Friday, 08 January 16
FOB INDONESIA COAL SWAP FOR DELIVERY H1'16 REMAIN FLAT AS DEMAND DROPS OFF
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month, flat week over week. The price for coal has been in a Dull Market sinc ...
Friday, 08 January 16
FOB RICHARDS BAY COAL SWAP FOR Q2'16 DELIVERY CLOSED UP $0.13 AT $45.50 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Friday, 08 January 16
WEEKLY US COAL PRODUCTION DECLINES 1.6% TO 11.7 MMST, SAYS EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11.7million short ...
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Showing 2616 to 2620 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- AsiaOL BioFuels Corp., Philippines
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
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