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