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