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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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- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Gujarat Sidhee Cement - India
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Renaissance Capital - South Africa
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- The University of Queensland
- Sojitz Corporation - Japan
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
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