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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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Thursday, 31 December 15
2016 FOB NEWCASTLE COAL SWAP RALLY TO CLOSE AT $37.98/TON
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.48 per ton (4.05%) this past week compared to the sam ...
Wednesday, 30 December 15
FINAL DEALS OF THE YEAR TAKING PLACE, AS SHIP OWNERS PREPARE FOR 2016 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The Holidays’ investment lull has taken a grip over the newbuilding and S&P market for second hand vessels, as shipbrokers are reporting ...
Tuesday, 29 December 15
CFR SOUTH CHINA COAL SWAPS ROSE MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Monday, 28 December 15
Q2' 15 U.S. STEAM COAL EXPORTS TOTALED 7.0 MMST; DOWN 16.9% FROM Q1 2015 - EIA
COALspot.com: U.S. coal production during second quarter 2015 totaled 211.1 million short tons.
According to EIA’s preliminary quarterly ...
Monday, 28 December 15
NOVEMBER NEWCASTLE COAL EXPORTS DECLINED 11.87%; THE AVERAGE PRICE OF COAL EXPORTS ROSE 1.37%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.120 billio ...
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- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Georgia Ports Authority, United States
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- The University of Queensland
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
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