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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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Monday, 21 October 19
SHIPPERS CHANGE COURSE AS FUEL RULES TARGET SULPHUR EMISSIONS - WOOD MACKENZIE
The International Maritime Organization (IMO), the industry’s regulator, will require all ships to reduce the level of sulphur in their engin ...
Monday, 21 October 19
COAL TO PLAY SIGNIFICANT ROLE IN SOUTH AFRICA POWER MIX - MINISTER, REUTERS REPORTED
South Africa’s plans for additional power generation over the next decade will involve a variety of energy sources, with coal still playing a ...
Monday, 21 October 19
ULTRAMAX: IN ASIA, TRIPS FROM THE SINGAPORE AREA WERE PAYING BETWEEN $14,000 AND $16,000, DEPENDING ON THE VESSEL SIZE AND DURATION - BALTIC BRIEFING
Capesize
The market traded in a relatively stable supported manner in the Pacific this week while the Atlantic experienced weakening turbulence ...
Friday, 18 October 19
WHY CRUDE TANKER RATES JUST FELL (HALFWAY) BACK TO EARTH - FREIGHT WAVES
Panic drove crude-tanker rates up, very briefly, to mind-bogglingly high assessed levels of around $300,000 per day. Now, the fear factor has been ...
Friday, 18 October 19
SHORT TERM STRENGTH FOR OZ COMMODITIES - BALTIC BRIEFING
Volatility in the global commodity markets is not expected to unduly rattle Australia’s commodity outlook through 2020, but the 2021 picture ...
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Showing 1306 to 1310 news of total 6871 |
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- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Australian Coal Association
- Goldman Sachs - Singapore
- The Treasury - Australian Government
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Vedanta Resources Plc - India
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Economic Council, Georgia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
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