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