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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, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
Wednesday, 30 September 15
Q1'16 FOB INDONESIA COAL SWAP FALLS $1.25 A TON AS SLIDE CONTINUES
COALspot.com: Indonesian coal swap for delivery Q4 2015 declined month on month and week over week.
The Q4 swap declined $ 0.72 (-1.78%) per t ...
Wednesday, 30 September 15
NEW BUILDING MARKET INSIGHT
COALspot.com: This year has been, beyond any doubt, a rather strenuous one for the newbuilding market. Ordering activity with regards to Dry Bulker ...
Tuesday, 29 September 15
FOB RICHARDS BAY COAL SWAPS ARE SLIDING
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$ ...
Monday, 28 September 15
API 5 FOB NEWCASTLE COAL SWAPS UP $2.15 IN ONE MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2015 delivery increased $2.10 per ton (5.15%) month over month to US$ 42.93 per ton. The ...
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- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- The University of Queensland
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
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