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