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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, 23 September 15
INDONESIA: NEW REGULATION APPLIES FINAL INCOME TAX TO MINERAL AND COAL SALES - FLORENCE GRACIA SANTOSO
To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of mineral and coal, a ...
Tuesday, 22 September 15
1Q16 FOB INDONESIA COAL SWAP DECLINED 6.49 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap declined $ 2.29 (-5.42%) per t ...
Tuesday, 22 September 15
FOB RICHARDS BAY COAL SWAPS FALL CONTINUES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
Monday, 21 September 15
Q4' 15 FOB NEWCASTLE COAL SWAP CLOSED HIGHER THAN Q2' 16 SWAP
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery increased $0.43 per ton (1.01%) month over month to US$ 42.95 per ton. The ...
Monday, 21 September 15
CFR SOUTH CHINA COAL SWAP GAINED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 0.45 (0.90 %) per ton month over month.
A commodit ...
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- Lanco Infratech Ltd - India
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- Heidelberg Cement - Germany
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- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Bhushan Steel Limited - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Medco Energi Mining Internasional
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- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
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- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
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- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Aditya Birla Group - India
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