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