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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, 18 January 16
Q1'16 CFR SOUTH CHINA COAL SWAP CLOSED AT $ 42.50 PER TON; UP 1% MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.43 (1.02%) per ton month over month.
A commodity swap is ...
Friday, 15 January 16
FOB INDONESIA COAL SWAPS FIRM SLIGHTLY LAST WEEK
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month over month and week over week.
According to AsiaClear OTC coal swap's r ...
Friday, 15 January 16
SHIPPING: 2016 STARTED WITH MISERY ACROSS THE BOARD FOR SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As one would have expected, the dry bulk market starter the new year where it left off in 2015, plunging to never seen before depths, as the market ...
Friday, 15 January 16
U.S. WEEKLY COAL PRODUCTION ROSE ACROSS ALL BASINS: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.4 million shor ...
Thursday, 14 January 16
FOB RICHARDS BAY COAL SWAP FOR Q3 DELIVERY CLOSED $5.90 LOWER THAN Q1 PRICE
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap up month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coal ...
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- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- PTC India Limited - India
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Australian Coal Association
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- The University of Queensland
- Economic Council, Georgia
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
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