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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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Showing 1806 to 1810 news of total 6871 |
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- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
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