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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, 03 October 17
RIO TINTO COMPLETES FIRST FULLY AUTONOMOUS RAIL JOURNEY IN WESTERN AUSTRALIA
Rio Tinto has successfully completed the first fully autonomous rail journey at its iron ore operations in the Pilbara region of Western Australia ...
Tuesday, 03 October 17
ALLIED MARKET ANALYSIS
It seems as though the future of the oil trade was once again put into the spotlight, as the Asia Pacific Petroleum Conference took place last week ...
Friday, 29 September 17
U.S WEEKLY COAL OUTPUT DROPS FOR THE FIFTH WEEK IN A ROW, EIA DATA SHOWS
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.7 million short ...
Thursday, 28 September 17
SUPRAMAX: S.CHINA TRIP TO INDIA HAS BEEN FIXED AT AROUND US$ 11000 - FEARNLEYS
Supramax
The hot market seen the last weeks in the Pacific has softened as the Golden week holiday in China approaches and the October shipments ...
Thursday, 28 September 17
THE 'UNREASONABLE' COST OF CASUALTY REPAIRS: ASSOCIATION OF AVERAGE ADJUSTERS CHAIRMAN DETAILS CLAIMS DILEMMAS
KNOWLEDGE TO ELEVATE
The ‘unreasonable’ cost of casualty repairs: Association of Average Adjusters chairman details claims dilemma ...
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Showing 1926 to 1930 news of total 6871 |
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- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- White Energy Company Limited
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
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