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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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- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
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