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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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Wednesday, 07 October 15
U.S. COAL EXPORTS FOR THE FIRST SEVEN MONTHS DOWN 21 PER CENT COMPARED WITH THE SAME PERIOD IN 2014 - EIA
Coal Supply
Lower U.S.’s domestic coal consumption and reduced exports contribute to a forecast decline of 89 million short tons (M ...
Wednesday, 07 October 15
SHIPPING MARKET INSIGHT - INTERMODAL
Sale and Purchase activity during the first three quarters of 2015 and more specifically during the summer season has been rather remarkable. 421 v ...
Wednesday, 07 October 15
INDONESIA COAL SWAPS HAVE CONTINUED TO DECLINE, FALLING ALMOST 7% M-M
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 2.23 (-5.51%) per t ...
Tuesday, 06 October 15
THE IMPACT OF LOW OIL PRICE ON THE SHIPPING INDUSTRY - LITERATED
The fall in global oil prices over the last one year has been beneficial to the shipping industry. The demand for oil tankers has picked up and the ...
Tuesday, 06 October 15
FOB RICHARDS BAY COAL SWAPS PLUNGE MORE THAN 6 PER CENT M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q4' 2015 declined week over week and month over month.
The Q4 swap was down US$ ...
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- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Ministry of Finance - Indonesia
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
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- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Central Electricity Authority - India
- Sarangani Energy Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Australian Coal Association
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Baiduri Energy - Indonesia
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