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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, 23 December 14
Q4'15 FOB RICHARDS BAY COAL SWAPS FALL $ 3.85 IN A MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 2.13 (-3.17%) month on month ...
Tuesday, 23 December 14
SHIPOWNERS ARE FINALIZING MORE DEALS AS YEAR END COMES CLOSER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
With the 2014 year just a few days before waving goodbye, shipowners are looking to close their pending deals in both the newbuilding and S&P m ...
Monday, 22 December 14
Q2'15 CFR SOUTH CHINA COAL SWAP CLOSED $ 0.30 LOWER THAN Q1'15 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.67 (-5.81%) month over month and US$ 0.35 (-0.58%) ...
Monday, 22 December 14
API 5 FOB NEWCASTLE COAL SWAPS ARE HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.71 per MT (-3.24%) and closed at US$ 51.02 on 19 December month ...
Sunday, 21 December 14
PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA FALLS FURTHER
COALspot.com: The BDI continued its fall as cape index lost heavily week on week.
The BDI was down 6.95 percent week over week and closed at 8 ...
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- Parliament of New Zealand
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
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