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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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Wednesday, 24 August 16
DRY BULK VESSELS FACE CONTINUED DISTRESS - CLEAR ASSET
Dry bulk vessels have faced extreme distress in recent years. With a combination of factors including newer vessels being ordered with up to 5-year ...
Tuesday, 23 August 16
4200 GAR COAL INDEX CLIMB 15.96% YEAR TO DATE - CS COAL INDEX
COALspot.com: Average 4200 GAR coal index of Indonesian origin rose 1.65 % week over week to averaging $31.46 per ton this past week, shows CS (i) ...
Tuesday, 23 August 16
KOMIPO TO IMPORT 250K OF 5,700 KCAL/KG NAR COAL FOR Q4' 16
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for total 250,000 Metric Tons of Bituminous Coal for ...
Monday, 22 August 16
INDONESIA'S CS 5000 GAR THERMAL COAL INDEX, ROSE TO A 57-WEEKS HIGH TO TOP $43.47 A TON
COALspot.com: Indonesia’s CS 5000 GAR thermal coal index, rose to a 57-weeks high to top $US43. 47 a ton in the latest week, extending a 18-w ...
Monday, 22 August 16
THE FREIGHT MARKET WAS STEADY THIS PAST WEEK; CAPE INDEX DECLINE 5.38%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week except ...
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Showing 2311 to 2315 news of total 6871 |
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- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- White Energy Company Limited
- Interocean Group of Companies - India
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- The University of Queensland
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
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