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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, 28 April 19
SUPRAMAX: A 54,000DWT VESSEL OPEN GRESIK FIXED VIA AUSTRALIA, REDELIVERY CHINA, IN THE MID $12,000S - BALTIC BRIEFING
Capesize
Following the holidays, activity increased in both the Pacific and Atlantic Basins. The 5TC average rallied, closing at $8,596, up $1, ...
Wednesday, 24 April 19
PANAMAX: IN THE EAST, THE MARKET MOVED SIDE-WAYS, WITH FEWER COAL CARGOES FROM INDONESIA PUTTING PRESSURE ON RATES - INTERMODAL
Sentiment in the Dry Bulk market slowly but steadily kept improving last week as Capesize rates remained in recovery mode and Panamax earnings also ...
Wednesday, 24 April 19
SHIPPING MARKET INSIGHT - IS THIS A BANKERS' MARKET? - INTERMODAL
Over the last 10 years, many of the traditional and top lending banks have made the decision to either downsize their portfolios or even exit shipp ...
Monday, 22 April 19
COAL INDIA TO ASK POWER PLANTS TO CUT COAL IMPORTS - DNA
Co to encourage import substitution with domestic supplies at power plants
Surge in coal imports has now forced Coal India Ltd (CIL) ...
Thursday, 18 April 19
BIMCO SEES HARD TIMES AHEAD FOR CAPESIZES
China’s increased use of scrap metal for its production of crude steel is fundamentally critical to the dry bulk shipping industry. Mostly Ca ...
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Showing 1411 to 1415 news of total 6871 |
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- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- PTC India Limited - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
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