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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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- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
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