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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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Wednesday, 28 January 15
CAPES CONTINUED THEIR UPWARD MOVEMENT LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market displayed a mirror performance of that of the week prior, with the Capesize market correcting further upwards and ...
Tuesday, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
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 fell ...
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- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- The University of Queensland
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
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