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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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Friday, 18 November 16
U.S. WEEKLY COAL PRODUCTION TOTALS 16.8 MMST, DOWN 0.8%, SAYS EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.8 million short ton ...
Thursday, 17 November 16
FROTHY THERMAL COAL PRICES POINT TO DOWNSIDE PRESSURES IN 2017 - FITCH
Fitch Ratings says in an Outlook Report that the Asian thermal coal industry will remain under pressure in 2017 due to more-than-adequate capacity ...
Thursday, 17 November 16
CHINA STEEL EXPORTS TO REMAIN HIGH IN 2017, FITCH SAYS
Fitch Ratings expects Chinese steel exports to remain at around 100 million metric tons (Mt) in 2017, due to flat 'apparent' consumption an ...
Wednesday, 16 November 16
SHIPPING MARKET INSIGHT
Going through a relatively interesting second half of the year so far in the ship repair sector, we are experiencing a volatile climate of differen ...
Tuesday, 15 November 16
CHINA, FOR MANY YEARS NOW HAS SERVED AS A MAJOR GROWTH ENGINE FOR ASIA - ALLIED SHIPPING RESEARCH
It’s been a turbulent couple of days after the announcement of the U.S. Presidential results in the early hours of Wednesday.
After week ...
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Showing 2211 to 2215 news of total 6871 |
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- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Minerals Council of Australia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Planning Commission, India
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
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