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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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Monday, 04 August 14
Q1' 15 API 8 CFR SOUTH CHINA COAL SWAP CLOSED AT US$ 69.37 ON 1 AUGUST 2014; A $ 1.10 HIGHER COMPARED TO Q4' 2014 CLOSING
COALspot.com: Coal swap prices are showing a positive move upward this past week. API 8 CFR South China Coal swap for Q4, Q1 and Q2 2015 show ...
Sunday, 03 August 14
LACK OF COAL SHIPMENTS FROM FAR EAST/SE ASIA, THE PRESSURE ON CHARTER RATES CONTINUED THIS WEEK
COALspot.com: This week, the freight rates were almost flat as charter rates were also almost steady from last week.
The BDI was up by 2.59 pc ...
Friday, 01 August 14
UNCERTAINTY IN ASIAN COAL MARKETS WHERE INDEX-LINKED PRICING DOMINATES - SGX
COALspot.com: In the past 3 years, seaborne thermal coal markets have been in a state of constant oversupply.
Reuters expects this oversupply ...
Friday, 01 August 14
U.S PRODUCED 19.4 MMST OF COAL IN A WEEK, SAYS EIA
COALspot.com – United States the world's second largest coal producer, produced approximately 19.40 million short tons (mmst) of coal in ...
Thursday, 31 July 14
CAPESIZE: CARGO VOLUMES, COAL IN PARTICULAR, PRESENTLY NOT SUFFICIENT TO EMPLOY A GROWING FLEET - FERNLEYS
Handy
Both the Atlantic and Pacific has improved in the supramax segment over the last week, said Fernleys in Its latest weekly report . There we ...
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- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
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