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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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Thursday, 02 January 20
SULPHUR 2020 COMPENDIUM - HOW ARE INDIVIDUAL PORT STATES EXPECTED TO REACT? - STANDARD CLUB
KNOWLEDGE TO ELEVATE
With the new sulphur limits soon to be in force, Standard Club has been investigating the ways in which certain jurisdict ...
Monday, 30 December 19
AUSTRALIAN MINERS HIT BY LOWEST THERMAL COAL PRICE IN MORE THAN A DECADE - THE GUARDIAN
Australian coal exporters have experienced the biggest annual drop in thermal coal prices in more than a decade during 2019, raising doubts about i ...
Monday, 30 December 19
INDIA'S COAL IMPORTS RISE 4% TO 161.43 MT IN APRIL-NOVEMBER 2019 - PTI
The country’s coal imports registered an increase of 4.4 per cent to 161.43 million tonnes (MT) in the April-November period of the ongoing f ...
Sunday, 29 December 19
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Sunday, 29 December 19
IMO 2020 COMPLIANCE: IT'S UP TO US TO BE GOOD CITIZENS - IBIA
One of the concerns around implementation of the 0.50% sulphur limit has been, and continues to be, the need for effective enforcement to ensure a ...
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Showing 1216 to 1220 news of total 6871 |
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- Rio Tinto Coal - Australia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- PTC India Limited - India
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
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