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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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Saturday, 26 December 15
FOB INDONESIA COAL SWAPS KEEP DROPPING
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month and week over week.
According to AsiaClear OTC coal swap's rep ...
Friday, 25 December 15
WEEKLY US COAL PRODUCTION ESTIMATES DIP 8.5%
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 14.7 million shor ...
Thursday, 24 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SHED US$ 0.60 PER TON OVER WEEK, AND STANDS AT US$ 43.25 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Thursday, 24 December 15
GLOBAL MARINE FUEL REGULATIONS COULD SHOCK REFINING AND OIL MARKETS - OPEC | HELLENIC SHIPPING NEWS
IMO regulations call for global standards for sulphur content in marine fuel to be tightened to 0.5% from its present 3.5%. There is uncertainty ov ...
Thursday, 24 December 15
DRY BULKERS' VALUES ARE PLUNGING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Dry bulk carriers’ values are falling across the board, as the fall of freight rates is taking its toll, as is to be expected. In fact, accor ...
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- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- The University of Queensland
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
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