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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, 08 December 15
Q1' 16 API 5 FOB NEWCASTLE COAL SWAP CLOSED AT $ 36.73 A TON; 1.73% HIGHER COMPARED TO Q3' 16 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $1.47 per ton (3.85%) month over month to US$ 36.73 per ton. The swap ...
Tuesday, 08 December 15
HOW TO MITIGATE LEGAL RISKS WHEN PURCHASING BUNKERS - LESSONS LEARNED FROM THE OW BUNKER COLLAPSE - THE SWEDISH CLUB
KNOWLEDGE TO ELEVATE
About a year has passed since OW Bunker & Trading A/S filed for bankruptcy. The collapse shows that there are signifi ...
Monday, 07 December 15
5000 GAR CS (I) COAL INDEX REMAIN THE SAME OVER LAST WEEK
COALspot.com: The 5000 GAR CS (i) coal index remain the same over last week.
According to the CS (i) coal (system generated) index, the CS 50 ...
Monday, 07 December 15
COAL DEMAND IN 2016 FAILS TO SUPPORT PRICES; CFR SOUTH CHINA COAL SWAPS SEEN AT $US 42 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 1.70 (3.88%) per ton month over month.
A commodity swap ...
Sunday, 06 December 15
THE BDI DECLINED BY 3.09 PERCENT TO 563 POINTS ON 4 DECEMBER
COALspot.com: The BDI declined by 3.09 percent to 563 points on 4 December 2015.
The Cape index was also declined by 10.01 percent to 890 poin ...
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- Vizag Seaport Private Limited - India
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- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
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- SMG Consultants - Indonesia
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- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
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- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
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- Uttam Galva Steels Limited - India
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
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