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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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Friday, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
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Showing 4816 to 4820 news of total 6871 |
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- Miang Besar Coal Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Minerals Council of Australia
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- The University of Queensland
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- Posco Energy - South Korea
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Energy Link Ltd, New Zealand
- Semirara Mining Corp, Philippines
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