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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, 07 July 15
FOB NEWCASTLE COAL SWAP ADVANCED MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery up $ 0.28 per MT (-0.61%) month over month to US$ 45.85 per mt. The swap wa ...
Monday, 06 July 15
KOREA MIDLAND POWER COMPANY LIMITED ISSUED A TENDER FOR 250K MT BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 250K Metric Tons (MT) of 5300 kcal/kg NAR coal ...
Monday, 06 July 15
COAL TRADING & RISK MANAGEMENT TRAINING COURSE
Are you ready to invest in yourself and take your trading and risk management strategy to the next level? The Coal Trading & Risk Management Tr ...
Monday, 06 July 15
CFR SOUTH CHINA COAL SWAP; DECLINED D-O-D,W-O-W AND M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.53 (1.01%) per MT month over month.
A commodity swap ...
Sunday, 05 July 15
THE BALTIC DRY INDEX WAS DOWN 18%; PANAMAX UP 9%
COALspot.com: The freight market was soft during this week. However indices closed slightly firmer end of the week on 3rd July.
The BDI was do ...
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- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- LBH Netherlands Bv - Netherlands
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- The University of Queensland
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Georgia Ports Authority, United States
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
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