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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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Sunday, 02 March 14
THE FREIGHT MARKET WAS STEADY TO FIRM THIS PAST WEEK - CAPT. REDDY
COALspot.com: The freight market was steady to firm this past week. The BDI was up 7.06 pct and closed at 1258 points and the cape index was also fi ...
Friday, 28 February 14
PTBA TO INCREASE ITS COAL TERMINAL'S LOADING CAPACITY TO 25 MILLION TONS PER ANNUM BY JULY 2014
COALspot.com: PT. Bukit Asam (PTBA), the Indonesian government owned coal miner operates several coal mining units in Sumatera as well as in Kaliman ...
Friday, 28 February 14
U.S PRODUCED 1.9% LESS COAL WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Friday, 28 February 14
DRY BULK MARKET SLOWLY BUT STEADILY FINDS ITS FOOTING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, hit by the low seasonal demand which is a typical characteristic of the first quarter of each year, is beginning to emerge from ...
Thursday, 27 February 14
PANAMAX : MARKET CONTINUED TO DECLINE IN THE ATLANTIC
Handy
The Atlantic handy/supra market experienced a downward trend this week but not a dramatic one. TA rates are down around USD 800 w-o-w lead b ...
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Showing 3826 to 3830 news of total 6871 |
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- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Australian Coal Association
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
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