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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, 13 November 13
Q3' 14 CFR SOUTH CHINA COAL SWAPS CLOSED HIGHER THAN Q1' 14 PRICES
COALspot.com : API 8 CFR South China Coal swaps for average Q1 14 delivery gained 0.55 percept W-W on Friday 8 November 2013. The CFR South China Co ...
Wednesday, 13 November 13
THE SOFTENING HAS AFFECTED THE BIGGER SIZE SEGMENTS; SMALLER ONES STILL APPEAR TO BE VERY STABLE - INTERMODAL
After a month and a half of back to back weekly declines, the dry bulk market has finally reversed its negative course. We believe that there should ...
Wednesday, 13 November 13
DRY BULK MARKET HAS REVERSED ITS NEGATIVE COURSE - INTERMODAL
Chartering (Wet: Firm+ / Dry: Stable+ )
The Dry Bulk market has reversed its negative course this past week with rates for Capes making up fo ...
Wednesday, 13 November 13
NEWCASTLE COAL EXPORTS PLUNGE 12.40% IN W/E 10 NOVEMBER FROM THE PRIOR WEEK
COALspot.com: In the week ended November 11, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totaled 2.42 ...
Monday, 11 November 13
TAMIL NADU STATE OWNED POWER GENERATOR TO IMPORT 3.7 MMT OF 6000 GAD COAL
COALspot.com - TANGEDCO, Tamil Nadu Generation & Distribution Corporation Ltd, Tamil Nadu state owned power generator & distributor intends ...
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- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Global Coal Blending Company Limited - Australia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- The University of Queensland
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
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