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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, 05 November 15
Q2'16 INDO THERMAL COAL SWAP CONTRACT FOB INDONESIA FALLS TO $39.90/T
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week. Price of coal seen no improvements this past we ...
Thursday, 05 November 15
INFORMATION EXCHANGE GROUP'S LATAM MINING SECURITY SUMMIT 2016 - INTERNATIONAL CONFERENCE ON TECHNOLOGY SECURITY IN MINING
Press Release: LATAM Mining Security Summit 2016 is a carefully designed event that will bring together the leading stakeholders in the mining sect ...
Wednesday, 04 November 15
MARKET INSIGHT - CHRISTOPHER THOMAS WHITTY
Four companies dominate global iron ore production, namely; BHP Billiton, Vale, Rio Tinto, and Fortescue Metals Group. Together these companies con ...
Wednesday, 04 November 15
FOB RICHARDS BAY COAL SWAPS GAIN W-W AND M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and month over month.
The Q4 swap was up US$ 1.4 ...
Tuesday, 03 November 15
THE DISCHARGE OF CARGO IN THE PRC WITHOUT ORIGINAL BILLS OF LADING - CLYDE&CO
KNOWLEDGE TO ELEVATE
On occasions, a vessel may arrive at a port and be ready to discharge but the original bills of lading in respect of the ...
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- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- The University of Queensland
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Planning Commission, India
- London Commodity Brokers - England
- Anglo American - United Kingdom
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
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