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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, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
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Showing 4816 to 4820 news of total 6871 |
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- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- Planning Commission, India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- PTC India Limited - India
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Australian Coal Association
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
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