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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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Tuesday, 17 October 17
SULPHUR 2020: COMING, READY OR NOT - ALIBRA SHIPPING
Some 70% of shipping companies surveyed say they do not believe the industry is ready for IMO’s 2020 deadline, when a global limit of 0.5% su ...
Tuesday, 17 October 17
U.S RECORD EXPORTS OIL TO EAST HAS HELPED THE TANKER TRADE - GEORGE LAZARIDIS
There was a flood of fresh news this week which clouded the overall prospects of the crude oil market. Just one week prior Saudi Arabia and Russia, ...
Monday, 16 October 17
INDONESIA TO INDIA COAL FREIGHT RATES STAY FIRM
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has stayed firm, week over week, ...
Friday, 13 October 17
INDIKA ENERGY SIGNS SHARE PURCHASE AGREEMENTS FOR AN ADDITIONAL 45% STAKE IN KIDECO
PT Indika Energy Tbk. and its wholly-owned subsidiary PT Indika Inti Corpindo (collectively, “Indika Energy”) has entered into separate ...
Friday, 13 October 17
THE SHORT-TERM OUTLOOK FOR THE PANAMAX MARKET REMAIN POSITIVE - FEARNLEYS
Supramax
The market has picked up strongly since last week with the Chinese holidays. In the Pacific rates are increasing with some strong number ...
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Showing 1911 to 1915 news of total 6871 |
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- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Barasentosa Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Australian Coal Association
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- White Energy Company Limited
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
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