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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, 20 January 16
Q3'16 FOB NEWCASTLE COAL SWAP CLOSED $ 2.40 LESSER THAN Q1'16 CLOSING PRICE OF $ 38.10
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $0.77 per ton (2.06%) this past week compared to the sam ...
Wednesday, 20 January 16
SHIPPING MARKET INSIGHT - NASOS SOULAKIS
If you believe in the “January effect”, the theory according to which the beginning of a new year has a positive effect on financial in ...
Tuesday, 19 January 16
HAPPY NEW YEAR, COAL PRODUCERS! OR MAYBE NOT - ANDY ROBERTS
To coal producers, 2015 must have seemed far longer than 365 days. From their perspective, as bad as markets were at the beginning of the year, and ...
Tuesday, 19 January 16
COALTRANS ASIA IS RETURNING TO BALI
22nd Coaltrans Asia
Coaltrans Asia is returning to Bali to bring together over 1000 industry decision makers and thought leaders for three day ...
Monday, 18 January 16
INDONESIAN 5700 GAR COAL INDEX ROSE 0.60% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline slightly week over week to averaging $39.93 per ton on this past Friday, acc ...
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- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Australian Coal Association
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Marubeni Corporation - India
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
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