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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, 14 April 15
COAL OUTPUT FALLS AS PRICES CONTINUE TO LAG - JP
Coal output dropped by 21 percent in the first three months of the year as low prices for the commodity forced mining companies to reduce activitie ...
Tuesday, 14 April 15
SUB-BIT FOB INDONESIA COAL SWAPS FOR Q4 DELIVERY CRASHES THROUGH $44
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.25 (4.77%) ...
Monday, 13 April 15
Q2 FOB NEWCASTLE COAL SWAP CLOSED AT $45.28 PMT; DECLINED 7.50% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.67 per MT (-7.50%) month over month and US$ 0.39 week on wee ...
Monday, 13 April 15
Q4 CFR SOUTH CHINA COAL SWAP CLOSED AT US$ 50.97
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.50 (-8.05%) per MT month over month and US$ 0.12 (-0 ...
Sunday, 12 April 15
INDONESIA TO INDIA FREIGHT RATE IS EXPECTED TO BE SOFT
COALspot.com: The freight market was steady, however the BDI was declined slightly week over week.
BDI dropped 1.36 pct and closed at 580 poin ...
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- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
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