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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, 05 May 15
OVERSUPPLY PUTTING INDONESIAN COAL PRICES UNDER PRESSURE
COALspot.com: Indonesian coal swap for delivery Q3 2015 lost week over week and month on month, this past week.
The Q3 swap was declined US$ 1 ...
Tuesday, 05 May 15
FOB RICHARDS BAY COAL SWAPS MOVE NORTH THIS PAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 increased month over month and week over week.
The Q3 swap has increas ...
Monday, 04 May 15
FOB NEWCASTLE COAL SWAP Q1'16 PRICES SLIGHTLY LOWER COMPARED TO Q3'15 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery gained US$ 1.38 per MT (3.12%) month over month and US$ 0.93 week on week. ...
Monday, 04 May 15
Q1' 2016 CFR SOUTH CHINA THERMAL COAL SWAP CLOSED HIGH THAN 2015 DERIVATIVES
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.15 (-0.29%) per MT month over month and increased US$ 0.07 ...
Sunday, 03 May 15
DRY BULK INDICES WEAKEN SLIGHTLY THIS WEEK
COALspot.com: The freight market was flat to weak for the week starting from 27 April. The BDI was fell around 2.17% closed at 580 points.
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- Essar Steel Hazira Ltd - India
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- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
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- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
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- White Energy Company Limited
- South Luzon Thermal Energy Corporation
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
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- Neyveli Lignite Corporation Ltd, - India
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- Interocean Group of Companies - India
- Latin American Coal - Colombia
- SMC Global Power, Philippines
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- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
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- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
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- The State Trading Corporation of India Ltd
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- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Energy Development Corp, Philippines
- Agrawal Coal Company - India
- Minerals Council of Australia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
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- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
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- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
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- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Planning Commission, India
- The University of Queensland
- Medco Energi Mining Internasional
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Anglo American - United Kingdom
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Uttam Galva Steels Limited - India
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- Lanco Infratech Ltd - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
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- GMR Energy Limited - India
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- Rashtriya Ispat Nigam Limited - India
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
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