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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, 17 November 15
FOB NEWCASTLE COAL SWAPS FALL: Q1'16 SLID 11.45% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $4.75 per ton (11.45%) month over month to US$ 36.75 per ton. The swap ...
Monday, 16 November 15
KOMIPO INVITES BIDS FOR 1.295 MILLION TONS OF BITUMINOUS COAL FOR Q1 - Q2'16
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 1,295,000 Metric Tons (MT) of minimum 4,600 kc ...
Monday, 16 November 15
SOUTH CHINA COAL SWAPS DECLINE CONTINUES THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.05 (12.59%) per ton month over month.
A commodity swa ...
Monday, 16 November 15
CLARKSEA INDEX COMPETITION: IS IT ALL IN THE TIMING? - CLARKSONS
Readers of the Shipping Intelligence Weekly are invited each year to predict the value of the ClarkSea Index one year ahead in the first week of No ...
Monday, 16 November 15
DRY BULK MARKET: Q1' 2016 SHAPING UP TO BE A ' DISASTROUS' ONE OF PROJECTED LOWER IRON ORE IMPORTS FROM CHINA
Over the course of the past year or so, it’s been the drop of coal imports from China, which has had a detrimental effect on the course of dr ...
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- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Australian Coal Association
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
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