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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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Tuesday, 20 October 15
FOB RICHARDS BAY COAL SWAPS SINK INTO RED THIS PAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
Tuesday, 20 October 15
API 5 FOB NEWCASTLE COAL SWAP CLOSED NEGATIVE
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $1.23 per ton (2.86%) month over month to US$ 41.80 per ton. The ...
Monday, 19 October 15
RUSSIA MAJOR COAL MINER KRU CUTS 4.5 MLN T/YR "UNPROFITABLE" EURO SALES - JACQUELINE HOLMES
COALspot.com: Kuzbassrazrezugol (KRU), one of Russia's largest producers of high-quality coal, plans to cut its coal exports in 2016 by about 4 ...
Monday, 19 October 15
CFR SOUTH CHINA COAL SWAP CLOSED AT $48.68 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down just US cents 55 (1.12 %) per ton month over month.
A commodity ...
Monday, 19 October 15
KOMIPO SEEKS 1.28 MILLION T/Y COAL FOR DEC 2015 - Q2 2016
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,280,000 Metric Tons (MT) of minimum 4,600 kc ...
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- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
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- Maheswari Brothers Coal Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
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- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
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- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
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- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Indogreen Group - Indonesia
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- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- The University of Queensland
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Bukit Baiduri Energy - Indonesia
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