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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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Wednesday, 16 April 14
Q1 2014 : TERMS OF FREIGHT RATES THE PERFORMANCE IN THE DRY BULK MARKET HAS NOT MET THE HIGH EXPECTATIONS - INTERMODAL
This year the dates for the celebration of Easter will coincide for the Orthodox and the Catholic, so we are already seeing most people in the m ...
Tuesday, 15 April 14
NEWCASTLE SHIPPED MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 14 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Monday, 14 April 14
SUB-BIT FOB INDO COAL SWAP FOR Q1' 15 DELIVERY CLOSED AT US$ 60.12 PER MT
COALspot.com: Indonesian coal swaps for average Q4’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Monday, 14 April 14
INDONESIA'S Q1 COAL PRODUCTION LITTLE CHANGED EVEN WITH PRICE DROP - INVESTOR DAILY
Indonesia’s coal production by volume in the first quarter remained little changed from the same period last year despite the decline in t ...
Monday, 14 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAIN FOR THE MONTH & WEEK
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 4.61 percent month on month and closed at US$ 76.18 per mt as ...
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- Carbofer General Trading SA - India
- Deloitte Consulting - India
- MS Steel International - UAE
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
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