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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, 22 May 15
FOB INDONESIA COAL Q3'15 SWAP FINISHED THE WEEK UP 38 CENTS TO $43.65 PER MT
COALspot.com: Indonesian coal swap for delivery Q3 2015 gains week over week and lost month on month, past week.
The Q3 swap was declined US$ ...
Friday, 22 May 15
U.S WEEKLY COAL PRODUCTION STAYS FLAT AT 16 MMST
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.0 million short ...
Thursday, 21 May 15
PORT OF NEWCASTLE ACHIEVED ITS BEST EVER TOTAL COAL EXPORT TURNOVER OF 159 MILLION TONS IN 2014
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $900 million ...
Thursday, 21 May 15
ATLANTIC PANAMAX MARKET STARTED TO IMPROVE SLOWLY - INTERMODAL
COALspot.com: The Dry Bulk market closed off the week on the green last week, purely on the back of improved Capesize performance, while the rest o ...
Wednesday, 20 May 15
LOWER PRICES SEEN IN NEWBUILDING MARKET ON LOW DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Cash-rich ship owners, or at least, owners with substantial access to financing will be among the prime candidates, who will reap the benefits of t ...
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- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Planning Commission, India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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