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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, 29 October 15
Q2' 16 FOB INDONESIA COAL SWAP CLOSED US$ 37.40 PER TON; DECLINED 5.56 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.13 (-5.34%) per t ...
Wednesday, 28 October 15
Q2'16 FOB RICHARDS BAY COAL SWAP SEES FURTHER DECLINES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gained week over week and declined month over month.
The Q4 swap was d ...
Wednesday, 28 October 15
BDI INCREASE TOOK PLACE SOLELY ON THE BACK OF CAPESIZE PERFORMANCE, BUT........ - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a small improvement which nonetheless failed to lift sentiment, not only because ...
Tuesday, 27 October 15
Q1'16 API 5 FOB NEWCASTLE COAL SWAP DECLINE 6 PER CENT M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $2 per ton (4.66%) month over month to US$ 40.93 per ton. The swa ...
Monday, 26 October 15
PORT OF NEWCASTLE SHIPPED 10.5 PER CENT LESS COAL IN SEPTEMBER, COMPARED TO AUGUST LOADING
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.161 billi ...
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- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Star Paper Mills Limited - India
- Australian Coal Association
- Ministry of Finance - Indonesia
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
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