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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, 09 November 15
CFR SOUTH CHINA THERMAL COAL SWAP FOR Q3' 16 CONTRACT DECLINED US$ 4 PER TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 4.35 (9.03 %) per ton month over month.
A commodity swa ...
Monday, 09 November 15
INDIAN THERMAL COAL IMPORTS SURGED 18%; COKING COAL 6.31% DURING APRIL-OCTOBER: BUSINESS-STANDARD
Indian thermal coal imports surged 18% at the country's top 12 major ports to 55.90 million tonnes (MT) in the first seven months of the curren ...
Sunday, 08 November 15
THE FREIGHT MARKET KEEP DROPPING THIS WEEK - VISTAAR
COALspot.com: The freight market keep dropping this week.
The BDI down 12.48 percent week on week and closed at 631 points on 6 November 2015. ...
Sunday, 08 November 15
CAPESIZE FREIGHT RATES IN AUSTRALIA-CHINA ROUTES OVER 50% CHEAPER THAN BRAZIL-CHINA ROUTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China’s mining and steel industries are facing tectonic shifts over the past couple of years, with the country’s limiting of coal use, ...
Friday, 06 November 15
COAL PRODUCTION IN THE U.S. FELL SHARPLY FOR THE WEEK ENDING OCTOBER 31
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 16.6 million shor ...
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- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Barasentosa Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
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