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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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Monday, 30 March 15
WORST IS OVER FOR THE DRY BULK MARKET, BUT THE PAIN WILL REMAIN FOR YEARS TO COME, SAYS BIMCO CHIEF ANALYST - HELLENIC SHIPPING
The current demise of the dry bulk market isn’t one to go away anytime soon. That doesn’t mean that it can’t improve, with all sh ...
Monday, 30 March 15
Q3' 15 CFR SOUTH CHINA COAL SWAP: DECLINED 8.7% M-M; 12.77% Y-TO-D
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.00 (-8.70%) per MT month over month and US$ 1.33 (-2 ...
Monday, 30 March 15
Q2' FOB NEWCASTLE COAL SWAP CLOSED 4.47% HIGHER THAN Q4' CLOSING PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 5.42 per MT (-10.43%) month over month and US$ 1.60 (-3.32%) w ...
Sunday, 29 March 15
INDO - INDIA: SUPRAMAX & PANAMAX FREIGHT MARKET STEADY
COALspot.com: The freight market was almost stable as all segments slightly up except Panamax sector.
The BDI was up by just 0.85% week over w ...
Saturday, 28 March 15
IS NORTHERN EUROPE THE NEW MINING ELDORADO?
The Europe Mining 2015 Summit, organised by Global Summits organizer IRN on 17-18 June in Amsterdam, The Netherlands, will gather senior level repr ...
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- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- White Energy Company Limited
- Australian Coal Association
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- The University of Queensland
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
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