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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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Thursday, 31 December 15
2016 FOB NEWCASTLE COAL SWAP RALLY TO CLOSE AT $37.98/TON
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.48 per ton (4.05%) this past week compared to the sam ...
Wednesday, 30 December 15
FINAL DEALS OF THE YEAR TAKING PLACE, AS SHIP OWNERS PREPARE FOR 2016 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The Holidays’ investment lull has taken a grip over the newbuilding and S&P market for second hand vessels, as shipbrokers are reporting ...
Tuesday, 29 December 15
CFR SOUTH CHINA COAL SWAPS ROSE MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.68 (1.64%) per ton month over month.
A commodity swap is ...
Monday, 28 December 15
Q2' 15 U.S. STEAM COAL EXPORTS TOTALED 7.0 MMST; DOWN 16.9% FROM Q1 2015 - EIA
COALspot.com: U.S. coal production during second quarter 2015 totaled 211.1 million short tons.
According to EIA’s preliminary quarterly ...
Monday, 28 December 15
NOVEMBER NEWCASTLE COAL EXPORTS DECLINED 11.87%; THE AVERAGE PRICE OF COAL EXPORTS ROSE 1.37%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.120 billio ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Australian Coal Association
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Aboitiz Power Corporation - Philippines
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
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