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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, 07 October 15
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS DOWN 21 PER CENT COMPARED WITH THE SAME PERIOD IN 2014 - EIA
Coal Supply
Lower U.S.’s domestic coal consumption and reduced exports contribute to a forecast decline of 89 million short tons (M ...
Wednesday, 07 October 15
SHIPPING MARKET INSIGHT - INTERMODAL
Sale and Purchase activity during the first three quarters of 2015 and more specifically during the summer season has been rather remarkable. 421 v ...
Wednesday, 07 October 15
INDONESIA COAL SWAPS HAVE CONTINUED TO DECLINE, FALLING ALMOST 7% M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.23 (-5.51%) per t ...
Tuesday, 06 October 15
THE IMPACT OF LOW OIL PRICE ON THE SHIPPING INDUSTRY - LITERATED
The fall in global oil prices over the last one year has been beneficial to the shipping industry. The demand for oil tankers has picked up and the ...
Tuesday, 06 October 15
FOB RICHARDS BAY COAL SWAPS PLUNGE MORE THAN 6 PER CENT M-M
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$ ...
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- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
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- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Australian Coal Association
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
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