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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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Tuesday, 07 January 20
CLEANER AIR IN 2020: 0.5% SULPHUR CAP FOR SHIPS ENTERS INTO FORCE WORLDWIDE - EUROPEAN COMMISSION
From 1 January 2020, the maximum sulphur content of marine fuels is reduced to 0.5% (down from 3.5%) globally – reducing air pollution and pr ...
Tuesday, 07 January 20
BHP EYES INDIA FOR COAL GROWTH AS CHINA DEMAND FLATLINES - SYDNEY MORNING HERALD
Australia’s largest miner, BHP, believes the long-term trajectory of the emerging economy of India and the acceleration of its steelmaking ou ...
Sunday, 05 January 20
BUNKER QUALITY CLAIMS IN 2020 - ISSUES TO CONSIDER - CLYDE&CO
KNOWLEDGE TO ELEVATE
In recent years the shipping industry has faced a significant number of bunker quality claims, most notably ari ...
Saturday, 04 January 20
SUPRAMAX: A 53,000DWT VESSEL FIXING DELIVERY INDONESIA TRIP TO CHINA AT $4,000 AND A 58,000DWT SHIP FIXING DELIVERY EAST KALIMANTAN TRIP TO THAILAND AT $5,500 - BALTIC BRIEFING
Capesize
The New Year started with an erosion on pre-Christmas rates as the higher low sulphur fuel costs due to IMO 2020 affected levels. From ...
Thursday, 02 January 20
DMO 2020 PRICE SET FOR ELECTRICITY SECTOR - IAN WOLLFF
On the 26th December 2019, the Minister of Energy and Mineral Resources (ESDM) issued the decree No. 261.K/30.MEM/2019 about the States needs for c ...
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Showing 1211 to 1215 news of total 6871 |
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- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Australian Coal Association
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Eastern Energy - Thailand
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- The University of Queensland
- VISA Power Limited - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Deloitte Consulting - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
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