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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, 26 November 10
INDIA WILL IMPORT 100 MLN TONS OF COAL BY 2012 - LAKSHMINARAYANA
COALspot.com – “India’s coal shortfall will reach 100 million mt by 2011-12”, said Lakshminarayana, Vice Preside ...
Friday, 26 November 10
CHINAS COAL INVENTORY STAYS HIGH FOR 22 MONTHS AT 220 MLN T, ASSOCIATION
Xinhua News Agency reported that, China’s coal inventory has stayed high and unchanged for 22 months to be around 220 million tonnes, reflecti ...
Friday, 26 November 10
DR WOLFGANG CIESLIK TO HEAD GERMAN COAL IMPORTERS ASSOCIATION
COALspot.com – (Press Release): The Management Board of the German Coal Importers Association (Verein der Kohlenimporteure e.V.) has elected D ...
Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal pric ...
Thursday, 25 November 10
INDONESIAN ROUNDS ARE ACHIEVING IN THE LOW 10S, OWNERS ARE NOT KEEN FOR TRIPS TO INDIA - FEARNBULK
HANDY
Uneventful week - Supra/Panamax stems ex USG to China/Korea/Japan are the main focus + grains ex. Argentina. The Atlantic market activity re ...
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Showing 5511 to 5515 news of total 6871 |
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- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- GMR Energy Limited - India
- The University of Queensland
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Australian Coal Association
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
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