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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, 26 August 15
2Q'16 FOB INDONESIA COAL SWAP FALLS NEARLY 4.76 PER CENT M-O-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap was declined $ 2.20 (-5.13%) p ...
Tuesday, 25 August 15
INDONESIA MINERS' NPLS TO RISE FURTHER, BANK RISKS BUILD - FITCH
The NPLs of Indonesian mine and mine services companies are likely to rise further in the short term, says Fitch Ratings, after reaching multi-year ...
Tuesday, 25 August 15
MINER'S EARNINGS DROP ON FALLING COAL PRICES; Q2'16 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 52.23 A TON
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Monday, 24 August 15
FOB NEWCASTLE COAL SWAPS HIT FRESH LOW, DIPPING BELOW $42 A TON
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 2.20 per MT (-5.01%) month over month to US$ 41.70 per mt. The swap ...
Monday, 24 August 15
Q1'16 CFR SOUTH CHINA COAL SWAP CLOSED AT $ 48.65 PMT
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.89 (3.74%) per MT month over month.
A commodity ...
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- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Eastern Energy - Thailand
- Planning Commission, India
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Australian Coal Association
- Videocon Industries ltd - India
- MS Steel International - UAE
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Aditya Birla Group - India
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