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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, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Baramulti Group, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- PTC India Limited - India
- Romanian Commodities Exchange
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Parliament of New Zealand
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Tata Chemicals Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- MS Steel International - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
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