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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, 02 December 14
U.S WEEKLY COAL PRODUCTION FELL 1.4% WEEK ON WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.6 million short tons (mmst) o ...
Tuesday, 02 December 14
FOB RICHARDS BAY COAL SWAPS LOST MONTH OVER MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month, week on week and day over day.
The Q1 swap has lost U ...
Tuesday, 02 December 14
SUB-BIT FOB INDONESIA COAL Q1' 15 DELIVERY SWAP CLOSED AT US$ 49.50
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 0.4 ...
Monday, 01 December 14
SGX'S FOB NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 52.50
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.50 on 28 November after losing US$ 1.20 (-2.23%) month ove ...
Monday, 01 December 14
Q2' 15 DELIVERY CFR SOUTH CHINA COAL SWAP CLOSED 0.42% LOWER THAN Q1' 15 DELIVERY CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 2.45 (-3.78%) month over month and US$ 0.67 (-1.06%) we ...
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- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
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