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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, 07 April 15
SUB-BIT FOB INDONESIA COAL SWAP KEEPS DROPPING; DROPPED 2% W-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.44 (5.14%) ...
Tuesday, 07 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.96 PMT; DOWN 8.40% M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has declined U ...
Monday, 06 April 15
INDONESIA'S HBA FIXED AT US$ 64.48 PMT FOR APRIL DELIVERY; DOWN 4.84% M-M
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal benchmark prices to US$ 64.48 per MT in Apr ...
Monday, 06 April 15
FOB NEWCASTLE COAL SWAP DECLINED 12% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 6.23 per MT (-12%) month over month and US$ 0.86 (-1.85%) week ...
Monday, 06 April 15
CFR SOUTH CHINA COAL SWAP FALL CONTINUES
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.96 (-10.37%) per MT month over month and US$ 0.98 (- ...
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- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Baramulti Group, Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Planning Commission, India
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Australian Coal Association
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
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