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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, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
Tuesday, 26 January 16
OUTLOOK FOR GLOBAL OIL MARKETS - OPEC SECRETARY GENERAL
Opening address by HE Abdalla S. El-Badri, OPEC Secretary General, at the Chatham House Conference: Middle East and North Africa Energy 2016, Theme ...
Monday, 25 January 16
5700 GAR COAL INDEX CLOSED $ 50.08 PER TON, $0.20 LOWER FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 1.35 percent week over week to averaging $39.39 per ton on this past Friday, ...
Monday, 25 January 16
SHOULD A DEFAULTING PARTY BE ENTITLED TO AN INNOCENT PARTY'S SAVING, FOLLOWING THEIR BREACH OF CONTRACT? - THE NEW FLAMENCO REVISITED
KNOWLEDGE TO ELEVATE
This case was addressed by the club in our of January 2015, when the High Court decision became available. The background ...
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- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- The University of Queensland
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
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