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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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Wednesday, 11 November 15
Q3' 16 RICHARDS BAY COAL SWAP LOST 15.47% SINCE 6 AUGUST; 18.65% SINCE 6 MAY
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 declined week over week and month over month.
The Q1’ 2016 &nb ...
Wednesday, 11 November 15
VESSEL VALUES ARE DOWN BY AT LEAST 20% SINCE MID-AUGUST - INTERMODAL
I had promised not to spend another broker’s insight focusing on the dry bulk side. However, the sale of the M/V Churchill Bulker (179,362 dw ...
Tuesday, 10 November 15
SELF-HEATING OF COAL HAS EMPHASISED THE IMPORTANCE OF CHECKING THE ACCURACY OF SHIPPER'S DECLARATIONS - GARD
Recent incidents involving self-heating of coal has emphasised the importance of checking the accuracy of shipper’s declarations for all type ...
Tuesday, 10 November 15
API 5 FOB NEWCASTLE COAL SWAP SLIDES CONTINUE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.55 per ton (8.50%) month over month to US$ 38.20 per ton. The swap ...
Monday, 09 November 15
BUNKER PRICES TO KEEP SLIDING THIS WEEK, EXPERT SAYS - MARINE BUNKER EXCHANGE
The oil price volatility has continued this week. Two dollars up one day and the next day two dollars down. The oil market has been trading on the ...
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- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- The University of Queensland
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
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