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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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Monday, 18 May 15
FOB NEWCASTLE COAL SWAPS SCORE MONTHLY GAINS
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery gained US$ 0.87 per MT (1.99%) month over month and lost US$ 0.03 week on w ...
Monday, 18 May 15
Q1' 16 API 8 CFR SOUTH CHINA COAL SWAP CLOSED HIGHER THAN Q3' 15 CLOSING PRICE
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery up US$ 1.05 (2.10%) per MT month over month and US$ 0.53 (1.05%) pe ...
Sunday, 17 May 15
INDONESIA - INDIA FREIGHTS RATES EXPECTED TO FLAT TO SOFT NEXT WEEK
COALspot.com: The BDI was up by 10.45% and closed at 634 points week on week, while the Cape index saws big jump or up almost 55% for the same peri ...
Friday, 15 May 15
DRY BULK AND CONTAINER SHIPPING TO REMAIN WEAK, OUTLOOK FOR PORTS AND TANKERS POSITIVE - DREWRY MARITIME EQUITY RESEARCH
Global economy is in a gradual recovery mode, sending mixed signals to investors. Chinese economic data continues to remain weak as economy transit ...
Friday, 15 May 15
COAL PRODUCTION IN U.S DOWN 1.4 MILLION TONS FOR THE WEEK ENDING MAY 8
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.0 million short ...
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- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Minerals Council of Australia
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- The University of Queensland
- Ministry of Transport, Egypt
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Economic Council, Georgia
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
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