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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, 23 December 15
SHIPPING MARKET INSIGHT - PANOS MAKRINOS
As we are heading towards the end of the year we could argue that most of those involved in the shipping industry share mixed feelings for 2015. Th ...
Wednesday, 23 December 15
FOB NEWCASTLE COAL SWAP CLOSES FIRM
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery up $0.45 per ton (1.22%) month over month to US$ 37.20 per ton. The swap wa ...
Tuesday, 22 December 15
3800 GAR INDEX CLOSED AT US$ 22.03 PER TON; DOWN 0.15% W-O-W
COALspot.com: The 5000 GAR CS (i) coal index decline US$ 0.03 per ton (-0.07 %) week over week.
According to the CS (i) coal (system generated ...
Monday, 21 December 15
Q3' 2016 CFR SOUTH CHINA COAL SWAP CLOSED SLIGHTLY LOWER COMPARE TO Q1'16 CLOSING PRICE
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery up US$ 0.20 (0.48%) per ton month over month.
A commodity swap is a ...
Sunday, 20 December 15
THE FREIGHT RATES FROM INDONESIA TO INDIA IS EXPECTED TO BE SOFT NEXT WEEK
COALspot.com: The BDI facing all time low's this week. The bulk dry index closed at 477 points on 18 December 2015.
The cape index was als ...
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- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- London Commodity Brokers - England
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- The University of Queensland
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
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