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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, 11 November 14
PORT OF NEWCASTLE'S OCTOBER COAL SHIPMENTS SLIPPED 7.40% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,115.7 mil ...
Monday, 10 November 14
Q4' 15 FOB INDONESIA COAL SWAP CLOSED LOWER THAN Q1' 15 CLOSING PRICE OF US$ 49.58 ON LAST FRIDAY
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week on week and day on day.
The Q1 swap has lost just US$ ...
Monday, 10 November 14
SGX'S API 4 FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 65.44 ON 7 NOV, LOST 4.08% M-O-M
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has decreased US$ 2.78 (-4.08%) month over month and US$ 1.41 (-2.11%) w ...
Monday, 10 November 14
MOZAMBIQUE SIGNED CONTRACT WITH ETA STAR OF UAE FOR OPEN CAST COAL MINE IN TETE - AIM
- ETA Star to build slurry pipeline over the 600 kilometers to Beira in Mozambique to transport coal.
- The viability studies show the presence o ...
Monday, 10 November 14
YEAR 2015 CFR SOUTH CHINA COAL SWAP SHOWS A WEAK TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 3.74 (-5.63%) month over month and US$ 2.19 (+3.37%) we ...
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- Bhatia International Limited - India
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- The University of Queensland
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Planning Commission, India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
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