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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, 17 January 10
THE FUTURES FOR THREE YEARS (2010 - 2012) FIRMED UP - VISTAAR SINGAPORE
COALspot.com (Singapore): The freight market was a bit mixed with BDI up by about 159 points and closed at 3,299 points.
BDI
The cape index cont ...
Sunday, 17 January 10
NTPC TO DOUBLE CAPACITY BY 2017
NTPC, which will launch its follow-on public offer on February 3, plans to more than double its generating capacity to over 70,000 mega watts by 201 ...
Saturday, 16 January 10
HANDY CONTINUED FIRM CONDITIONS FOR MARKET IN THE ATLANTIC
HANDY
Continued firm conditions for the Handymax / Smax market in the Atlantic with the BSI having a continued upwards momentum. US$ 45,000 ac ...
Friday, 15 January 10
INDONESIA COAL - HEAVY RAINS HAVE LITTLE IMPACT ON COAL OUTPUT
Coal shipments from Indonesia's main coal-producing area are unlikely to be hit by heavy rains during January-February as many miners are prepared ...
Friday, 15 January 10
GOVT BRINGS IN DOMESTIC COAL MARKET OBLIGATION
The Energy and Mineral Resources Ministry has issued a ministerial decree requiring producers of coal and other minerals to allocate a proportion ...
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Showing 6081 to 6085 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Deloitte Consulting - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- The University of Queensland
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- The Treasury - Australian Government
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
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