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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, 28 April 15
Q2' 15 FOB RICHARDS BAY COAL SWAP CLOSED 4.18% HIGHER FROM MONTH AGO
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 increased month over month and slightly week over week.
The Q2 swap ha ...
Monday, 27 April 15
U.S. COAL PRODUCTION FELL BELOW ONE BILLION SHORT TONS IN 2013 - EIA
COALspot.com: For the first time in two decades, U.S. coal production fell below one billion short tons to 984.8 million short tons in 2013 from 1, ...
Monday, 27 April 15
Q3' 2015 FOB NEWCASTLE COAL SWAP CLOSED 3.69% LOWER THAN Q2' 2015 PRICE OF $46.36
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery gained US$ 0.19 per MT (0.41%) month over month and US$ 0.78 week on week. ...
Monday, 27 April 15
CFR SOUTH CHINA COAL SWAP SLOWLY IMPROVED THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 0.74 (-1.41%) per MT month over month and increased US$ 0.43 ...
Sunday, 26 April 15
DRY BULK MARKET KEPT IMPROVING THIS WEEK; CAPES AND PANAMAXES SHOW A SLIGHT PICKUP IN RATES
COALspot.com: The freight market was stable this week as BDI closed at 600 points after improving 0.50 percent week over week.
The cape ...
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- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Australian Coal Association
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
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