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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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Friday, 05 June 15
U.S PRODUCED 15.1 MMST OF COAL THIS PAST WEEK; LESS 20.7% COMPARED TO SAME PERIOD IN 2014
COALspot.com – United States the second largest coal producer in the world has produced approximately totalled an estimated 15.1 million shor ...
Thursday, 04 June 15
DRY BULK MARKET FAILED TO OFFER ANY POSITIVE SURPRISES - INTERMODAL
COALspot.com: This has been another week that the Dry Bulk market failed to offer any positive surprises, while the BDI, which is still faring belo ...
Wednesday, 03 June 15
SHIPPING MARKET INSIGHT - VASSILIS LOGOTHETIS
For some time now the Dry Bulk market has been severely affected by China’s slowing GDP growth rate that occurs in the background of increase ...
Tuesday, 02 June 15
FOB INDONESIA COAL Q3 SWAP ADVANCED 1.73% MONTH OVER MONTH
COALspot.com: Indonesian coal swap for delivery Q3 2015 gains month on month and lost week over week, this past week.
The Q3 swap was climbed ...
Tuesday, 02 June 15
FOB RICHARDS BAY COAL SWAPS; Q3'15 CLOSED HIGHER THAN Q1'16
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 up month over month and week over week.
The Q3 swap was up US$ 0.80 (1 ...
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- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- London Commodity Brokers - England
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- PTC India Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- The University of Queensland
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Australian Coal Association
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
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