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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, 15 October 15
INDONESIA COAL PRICE REFERENCE FALLS FOR SEVEN STRAIGHT MONTH IN OCTOBER
COALspot.com - The Director General of Mineral and Coal of Indonesia once a again revised down Indonesian coal benchmark price this month.
The ...
Thursday, 15 October 15
Q1' 16 FOB RICHARDS BAY COAL SWAP ADVANCED 2 PER CENT WEEK OVER WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 gain week over week and declined month over month.
The Q4 swap was dow ...
Tuesday, 13 October 15
DRY BULK SHIPPING FLEET NET EXPANSION WAS 1.3% DURING THIRD QUARTER, BUT ORDERBOOK REDUCED TO 17% OF THE TRADING FLEET
If the dry bulk market is to rebound on a sustainable level, it needs to limit the tonnage expansion, at least until demand picks up again, as Chin ...
Tuesday, 13 October 15
FOB NEWCASTLE COAL SWAP DECLINED 2 PER CENT MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery decreased $0.46 per ton (1.08%) month over month to US$ 42.17 per ton. The ...
Monday, 12 October 15
CFR SOUTH CHINA COAL SWAPS GAIN W-W; SLIGHTLY DOWN M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down just US cents 3 (0.06 %) per ton month over month.
A commodity ...
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- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
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