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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, 29 July 15
Q4' 15 FOB RICHARDS BAY COAL SWAPS DECLINE 4.41% TO $56.52 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
Tuesday, 28 July 15
INDONESIA DELAYS PLAN TO RAISE COAL ROYALTIES AMID PLUNGING PRICE - JP
The government will postpone a plan to increase royalty payments from coal miners as they are already burdened with the commodity’s plunging ...
Tuesday, 28 July 15
API 5 FOB NEWCASTLE COAL SWAP LOST M-M AND GAINED W-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery down $ 1.15 per MT (-2.51%) month over month to US$ 44.62 per mt. The swap ...
Monday, 27 July 15
KOMIPO INVITES BIDS FOR TOTAL 545,000 MT OF COAL FOR BORYEONG POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to purchase total 545,000 Metric Tons (MT) of coal ...
Monday, 27 July 15
CFR SOUTH CHINA COAL SWAP WEAK M/M; FIRM W/W
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.92 (1.77%) per MT month over month.
A commodity swap ...
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- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- CNBM International Corporation - China
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Bukit Makmur.PT - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- The University of Queensland
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Xindia Steels Limited - India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Australian Coal Association
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
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