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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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Monday, 18 January 16
Q1'16 CFR SOUTH CHINA COAL SWAP CLOSED AT $ 42.50 PER TON; UP 1% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.43 (1.02%) per ton month over month.
A commodity swap is ...
Friday, 15 January 16
FOB INDONESIA COAL SWAPS FIRM SLIGHTLY LAST WEEK
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month over month and week over week.
According to AsiaClear OTC coal swap's r ...
Friday, 15 January 16
SHIPPING: 2016 STARTED WITH MISERY ACROSS THE BOARD FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As one would have expected, the dry bulk market starter the new year where it left off in 2015, plunging to never seen before depths, as the market ...
Friday, 15 January 16
U.S. WEEKLY COAL PRODUCTION ROSE ACROSS ALL BASINS: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 14 January 16
FOB RICHARDS BAY COAL SWAP FOR Q3 DELIVERY CLOSED $5.90 LOWER THAN Q1 PRICE
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap up month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coal ...
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- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
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