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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, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
Monday, 04 March 24
IS YOUR GUARANTEE A GUARANTEE? NOTE TO SHIPOWNERS - GARD
KNOWLEDGE TO ELEVATE
The law of guarantees is not always obvious or easy to understand without proper guidance. This article clarifies the dif ...
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Showing 26 to 30 news of total 6871 |
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- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- The University of Queensland
- Georgia Ports Authority, United States
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Marubeni Corporation - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
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