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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, 25 November 14
SUB-BIT FOB INDONESIA COAL SWAP FOR Q2' 15 DELIVERY CLOSED AT $ 49.55
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, gained week on week.
The Q1 swap has lost US$ 0.12 (-0.24%) ...
Monday, 24 November 14
CHOPPY WATERS IN DRY BULK - SGX
COALspot.com: Dry bulk freight rates have experienced a sharp rise in volatility in recent weeks as bulk commodity supply has ramped up, said SGX i ...
Monday, 24 November 14
Q1 2015 FOB NEWCASTLE COAL SWAP CLOSED AT $ 52.73
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.73 on 21 November after losing US$ 0.40 (-0.75%) month ove ...
Monday, 24 November 14
CFR SOUTH CHINA COAL: Q2' 15 COAL SWAPS CLOSED LOWER COMPARED TO Q1' 15 SWAPS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 0.63 (-0.99%) month over month and US$ 0.12 (-0.19%) da ...
Sunday, 23 November 14
SPOT FREIGHT RATES IMPROVED SLIGHTLY OVER PREVIOUS WEEK
COALspot.com: The BDI was up 5.41 pct week on week and closed at 1,324 points on Friday. All the segments were up this week except Panamax index.&n ...
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- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
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- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
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- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- White Energy Company Limited
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Chamber of Mines of South Africa
- Economic Council, Georgia
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Indian Oil Corporation Limited
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
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