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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, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
Thursday, 17 September 15
MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
Having experienced, as it was much anticipated, a poor 1st half combined with negative forecasts, summer, in sharp contrast, proved to be more hope ...
Wednesday, 16 September 15
SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES LED A DECLINE IN INDONESIAN COAL PRODUCTION
COALspot.com: Slower growth in world coal demand particularly China and lower international coal prices have led to a decline in Indonesian coal pr ...
Wednesday, 16 September 15
HIGHER TAXES COULD LEAD GREEK SHIP OWNERS OUT OF THE COUNTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
A potential taxation overhaul of the shipping industry in Hellas, which could see the loss of particular tax benefits for ship owners, could lead t ...
Tuesday, 15 September 15
WORLD SEABORNE TRADE: ENTERING INTO A ROLE REVERSAL? - CLARKSONS
Over the past decade, world seaborne trade growth has been dominated by dry bulk and container trade. However, developments in the global economy t ...
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Showing 2811 to 2815 news of total 6871 |
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- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Minerals Council of Australia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Economic Council, Georgia
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Sojitz Corporation - Japan
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Australian Coal Association
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