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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, 15 September 15
Q2'16 RICHARDS BAY COAL SWAPS DIP TO $ 51.10 PER TON
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$ ...
Tuesday, 15 September 15
API 5 FOB NEWCASTLE COAL SWAP FOR 4Q' 2015 DELIVERY CLOSED AT $42.71 PER TON ON 11 SEPT, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery declined $0.94 per MT (-2.15%) month over month to US$ 42.71 per mt. The sw ...
Monday, 14 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP DECLINED $1.80 PMT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.62 (3.21 %) per MT month over month.
A commodity ...
Monday, 14 September 15
MOODY'S LOWERS COMMODITY PRICE ASSUMPTIONS ON MACRO, INDUSTRY FACTORS
COALspot.com: Moody's Investors Service has lowered its base metal price assumptions for 2015-17 as slowing growth in China, lower oil prices, ...
Sunday, 13 September 15
FREIGHT RATES ARE EXPECTED TO BE SOFT NEXT WEEK
COALspot.com: The BDI decreased further by 6.51 per cent or 57 points since last Friday and closed at 818 on 11 September 2015 while the cape index ...
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- Agrawal Coal Company - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- TNB Fuel Sdn Bhd - Malaysia
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- The University of Queensland
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Trasteel International SA, Italy
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
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