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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, 23 September 15
INDONESIA: NEW REGULATION APPLIES FINAL INCOME TAX TO MINERAL AND COAL SALES - FLORENCE GRACIA SANTOSO
To increase state revenue from the mining sector, the Government of Indonesia has imposed a new final income tax on any sale of mineral and coal, a ...
Tuesday, 22 September 15
1Q16 FOB INDONESIA COAL SWAP DECLINED 6.49 PER CENT M-M
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and week over week.
The 4Q swap declined $ 2.29 (-5.42%) per t ...
Tuesday, 22 September 15
FOB RICHARDS BAY COAL SWAPS FALL CONTINUES
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined week over week and month over month.
The 4Q swap was down US$ ...
Monday, 21 September 15
Q4' 15 FOB NEWCASTLE COAL SWAP CLOSED HIGHER THAN Q2' 16 SWAP
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery increased $0.43 per ton (1.01%) month over month to US$ 42.95 per ton. The ...
Monday, 21 September 15
CFR SOUTH CHINA COAL SWAP GAINED WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 0.45 (0.90 %) per ton month over month.
A commodit ...
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- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Minerals Council of Australia
- McConnell Dowell - Australia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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