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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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Tuesday, 15 September 15
Q2'16 RICHARDS BAY COAL SWAPS DIP TO $ 51.10 PER TON
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$ ...
Tuesday, 15 September 15
API 5 FOB NEWCASTLE COAL SWAP FOR 4Q' 2015 DELIVERY CLOSED AT $42.71 PER TON ON 11 SEPT, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery declined $0.94 per MT (-2.15%) month over month to US$ 42.71 per mt. The sw ...
Monday, 14 September 15
Q1'16 CFR SOUTH CHINA COAL SWAP DECLINED $1.80 PMT M-M
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.62 (3.21 %) per MT month over month.
A commodity ...
Monday, 14 September 15
MOODY'S LOWERS COMMODITY PRICE ASSUMPTIONS ON MACRO, INDUSTRY FACTORS
COALspot.com: Moody's Investors Service has lowered its base metal price assumptions for 2015-17 as slowing growth in China, lower oil prices, ...
Sunday, 13 September 15
FREIGHT RATES ARE EXPECTED TO BE SOFT NEXT WEEK
COALspot.com: The BDI decreased further by 6.51 per cent or 57 points since last Friday and closed at 818 on 11 September 2015 while the cape index ...
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- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Australian Coal Association
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Planning Commission, India
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
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