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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, 09 December 14
API 8 CFR SOUTH CHINA COAL SWAPS FELL 1.8% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 1.84 (-2.91%) month over month and US$ 0.95 (-1.52%) we ...
Monday, 08 December 14
GOVERMENT TO WITHDRAW CNC STATUS OVER SUSPECTED FLAWS - THE JAKARTA POST
The Energy and Mineral Resources Ministry’s directorate general for mineral and coal plans to review the clean and clear (CnC) status held by ...
Monday, 08 December 14
FOB NEWCASTLE COAL SWAPS SLIP W-O-W AND M-O-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.10 on 5 December after losing US$ 0.55 (-1.04%) month over ...
Sunday, 07 December 14
SUPRAMAX S8 ROUTE SLIGHTLY INCREASED WEEK ON WEEK
COALspot.com: The BDI continued its fall as cape index fell heavily week on week.
The BDI lost around14.83 pct within last five working day an ...
Saturday, 06 December 14
TANKER FLOATING STORAGE PLAYS COULD COME INTO PLAY IF VLCC RATES STAY AT CURRENT LEVEL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Contango: A phenomenon in commodities futures price curves where the delivery price of a futures contract is greater than the current price. With t ...
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- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
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- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
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- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- The University of Queensland
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Minerals Council of Australia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
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