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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, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
Wednesday, 30 September 15
Q1'16 FOB INDONESIA COAL SWAP FALLS $1.25 A TON AS SLIDE CONTINUES
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 0.72 (-1.78%) per t ...
Wednesday, 30 September 15
NEW BUILDING MARKET INSIGHT
COALspot.com: This year has been, beyond any doubt, a rather strenuous one for the newbuilding market. Ordering activity with regards to Dry Bulker ...
Tuesday, 29 September 15
FOB RICHARDS BAY COAL SWAPS ARE SLIDING
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$ ...
Monday, 28 September 15
API 5 FOB NEWCASTLE COAL SWAPS UP $2.15 IN ONE MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery increased $2.10 per ton (5.15%) month over month to US$ 42.93 per ton. The ...
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- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bharathi Cement Corporation - India
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Bulk Trading Sa - Switzerland
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
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