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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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- European Bulk Services B.V. - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
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