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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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Monday, 07 September 15
CFR SOUTH CHINA COAL SWAPS ROSE 1.1 PER CENT WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US$ 1.52 (3 %) per MT month over month.
A commodity sw ...
Sunday, 06 September 15
AUTOMATION AND TECHNOLOGY IS CERTAINLY PART OF THE SOLUTION FOR IMPROVING PERFORMANCE AND EFFICIENCY TO MAKE THE MINE OPERATIONS MORE PROFITABLE, HOWEVER............ - LUKE JALSEVAC
"The Technology and Innovation in Mining 2015" production team at Information Exchange Group interviewed Luke Jalsevac, Director, Busines ...
Sunday, 06 September 15
THE CAPE SIZE INDEX ROSE 10.83 PER CENT WEEK OVER WEEK
COALspot.com: The BDI, the Baltic exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, declined o ...
Saturday, 05 September 15
DRY BULK MARKET MAY SUFFER NOW, BUT IS BOUND FOR A RECOVERY THANKS TO A LIMITED FUTURE FLEET GROWTH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The slow increase of dry bulk tonnage growth this year could turn into a solid indicator of the market’s future prospects. According to a rec ...
Friday, 04 September 15
U.S. COAL PRODUCTION FOR THE W/E AUGUST 29, UP SLIGHTLY; FALL 4.5 PERCENT Y-Y: EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 18.7 million shor ...
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- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Eastern Coal Council - USA
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Australian Coal Association
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Directorate Of Revenue Intelligence - India
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Posco Energy - South Korea
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Romanian Commodities Exchange
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
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