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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, 09 September 15
FOB INDONESIA COAL SWAP LOSE GROUND ON SLOWING DEMAND
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap declined $ 1.92 (-4.52%) per t ...
Tuesday, 08 September 15
FOB RICHARDS BAY COAL SWAPS CONTINUE TO SHOW DECLINING TREND
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, 08 September 15
GANGAVARAM PORT IN INDIA DISCHARGES RECORD 112,599 MT OF STEAM COAL IN 24 HOURS
COALspot.com: Gangavaram Port, an all weather, multipurpose port with water depth up-to 21 meters, capable of handling fully laden Super Cap ...
Monday, 07 September 15
THE MINE OF THE FUTURE WILL HAVE ONLY TWO EMPLOYEES, A MAN AND A DOG - SCOTT MCGOWAN
"The Technology and Innovation in Mining 2015" production team at Information Exchange Group interviewed Scott Mcgowan, Director, Global ...
Monday, 07 September 15
FOB NEWCASTLE COAL SWAP FOR Q2' 16 DELIVERY CLOSED US CENTS 25 LOWER COMPARED TO Q4' 15
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery declined $0.73 per MT (-1.68%) month over month to US$ 42.65 per mt. The sw ...
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- Anglo American - United Kingdom
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Parliament of New Zealand
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
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