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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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- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- The Treasury - Australian Government
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Australian Coal Association
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
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