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