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