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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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Tuesday, 05 January 16
THE SHIPPING MARKET IN 2015 AND LOOKING FORWARD - BIMCO
Global economy: menacing clouds in the sky cast a shadow on global economic developments 2015 never really took off, even though the global economi ...
Tuesday, 05 January 16
4200 GAR COAL INDEX FALL TOWARD $27;SLIPPED 28.05% YEAR-TO-DATE
COALspot.com: Average 5000 GAR coal index has not moved in the past week, averaging $40.12 per ton on last Thursday, according to CS (i) Coal Index ...
Monday, 04 January 16
CFR SOUTH CHINA COAL SWAP REMAIN FLAT OVER CHRISTMAS & NEW YEAR HOLIDAYS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Friday, 01 January 16
FOB INDONESIA COAL SWAP FOR Q1'16 DELIVERY CLOSED AT $36.75 PER TON
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month but flat week over week.
According to AsiaClear OTC coal swap' ...
Thursday, 31 December 15
COAL PRICES FELL ON WEAK DEMAND
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 ...
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- Romanian Commodities Exchange
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Mercator Lines Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
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