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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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Thursday, 05 February 15
ULTRAMAX LEVELS FROM INDIA TO CHINA IN THE MID US$ 5000'S - FEARNLEYS AS
Handy
Despite the overall weak sentiment, there is a scent of optimism in the Atlantic market for ppt dates. Continent is still struggling with o ...
Wednesday, 04 February 15
MARKET INSIGHT - LINOS KOGEVINAS
It has been just about over 2 months since, in a move that surprised many and caused widespread apprehension, OPEC decided to maintain its producti ...
Tuesday, 03 February 15
Q1'15 FOB INDONESIA COAL SWAP CLOSED $ 3.29 HIGHER COMPARED TO Q4'15 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 rose week over week and month on month.
The Q1 swap up US$ 0.68 (+1.41%) month o ...
Tuesday, 03 February 15
FOB NEWCASTLE COAL SWAP FOR Q4 DELIVERY CLOSED 5.86% LOWER THAN Q1 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery rose US$ 0.26 per MT (+0.51%) week over week and declined US$ 0.02 (-0.04%) ...
Monday, 02 February 15
API 4 FOB RICHARDS BAY COAL SWAP ROSE WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has decli ...
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- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Sree Jayajothi Cements Limited - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Edison Trading Spa - Italy
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
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