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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, 29 December 19
AUSTRALIA SUFFERS WORST OF CHINA'S COAL CURBS AFTER EARLIER BOOM - BLOOMBERG
Australia is bearing the brunt of China’s year-end coal import restrictions, ceding market share to other exporters including Russia and Mong ...
Saturday, 28 December 19
SUPRAMAX: A 63,000DWT VESSEL, OPEN CIGADING, FIXED A TRIP VIA INDONESIA, REDELIVERY WEST COAST INDIA, AT $8,500 - BALTIC BRIEFING
Capesize
The Capesize market this past week has been attempting to recalibrate itself in consideration of weakening freight levels and increasing ...
Saturday, 28 December 19
CHINESE INDUSTRIAL CITY TO FURTHER CUT COAL CONSUMPTION - XINHUA
Harbin, capital city of Heilongjiang Province in China’s northeastern industrial heartland, is planning to further reduce its coal consumptio ...
Friday, 27 December 19
MISERY LOOMS OVER TOP COAL SHIPPERS AS CHINA TO BUY LESS IN 2020 BLOOMBERG
China isn’t cutting back on consumption of the most-polluting fossil fuel just yet, but it is set to reduce imports.
The world ...
Thursday, 26 December 19
REVIEW OF 2019 AND OUTLOOK FOR 2020 - OPEC
Global economic growth slowed in 2019, impacted by a variety of challenges. Trade issues not only led to reduction in global final consumption but ...
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Showing 1221 to 1225 news of total 6871 |
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- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
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