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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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Tuesday, 05 January 16
THE SHIPPING MARKET IN 2015 AND LOOKING FORWARD - BIMCO
Global economy: menacing clouds in the sky cast a shadow on global economic developments 2015 never really took off, even though the global economi ...
Tuesday, 05 January 16
4200 GAR COAL INDEX FALL TOWARD $27;SLIPPED 28.05% YEAR-TO-DATE
COALspot.com: Average 5000 GAR coal index has not moved in the past week, averaging $40.12 per ton on last Thursday, according to CS (i) Coal Index ...
Monday, 04 January 16
CFR SOUTH CHINA COAL SWAP REMAIN FLAT OVER CHRISTMAS & NEW YEAR HOLIDAYS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Friday, 01 January 16
FOB INDONESIA COAL SWAP FOR Q1'16 DELIVERY CLOSED AT $36.75 PER TON
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month but flat week over week.
According to AsiaClear OTC coal swap' ...
Thursday, 31 December 15
COAL PRICES FELL ON WEAK DEMAND
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 ...
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- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
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