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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, 05 January 15
CFR SOUTH CHINA COAL SWAPS GAINED WEEK OVER WEEK, SGX DATA SHOWS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 2.50 (-4.02%) month over month and gained US$ 0.20 ( ...
Monday, 05 January 15
FIVE ENERGY SURPRISES FOR 2015: THE POSSIBLE AND THE IMPROBABLE - KURT COBB
The coming year is likely to be as full of surprises in the field of energy as 2014 was. We just don't know which surprises! I am not predictin ...
Monday, 05 January 15
THE SHIPPING MARKET IN 2014 AND LOOKING FORWARD - BIMCO
2014 started with plenty of optimism for a considerably better global economy and an improved shipping market. Things turned out somewhat different ...
Monday, 05 January 15
API 5 FOB NEWCASTLE COAL SWAP FOR Q1'15 DELIVERY CLOSED US$ 0.45 HIGHER COMPARED TO Q2'15 CLOSING
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 0.60 per MT (-1.15%) month over month and gained US$ 0.02 (+0.04%) ...
Sunday, 04 January 15
BALTIC DRY INDEX CONTINUES ITS DECLINE IN 2015
Wish you all a very Happy New Year 2015. The last report was dated 19th Dec 2014 and due to Christmas and new year holidays no reports were publish ...
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- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Mjunction Services Limited - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Australian Coal Association
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
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