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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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- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Deloitte Consulting - India
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- White Energy Company Limited
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
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