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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, 12 August 15
FOB NEWCASTLE COAL SWAP FLAT WEEK OVER WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for 4Q’ 2015 delivery down $ 0.98 per MT (-2.20%) month over month to US$ 43.65 per mt. The swap ...
Tuesday, 11 August 15
GLOBAL PRODUCTION OF CRUDE STEEL REACHED A NEW ALL-TIME HIGH OF 1,661M TONNES IN 2014 - VDKI
COALpot.com: Global production of crude steel reached a new all-time high of 1,661m tonnes in 2014, said German Coal Importer Association, in its l ...
Tuesday, 11 August 15
2016 CFR S.CHINA COAL SWAPS CLOSED SLIGHTLY HIGHER THAN 4Q 2015 CLOSING PRICES; BUT NOT SIGNIFICANT
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery declined just US cents 10 (0.20%) per MT month over month.
A commodi ...
Monday, 10 August 15
SOUTH KOREAN UTILITY KOMIPO INVITES BITUMINOUS COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 560,000 Metric Tons (MT) of 4,600kcal/kg NAR c ...
Sunday, 09 August 15
THE PANAMAX MARKET HAS REMAINED WEAK THIS WEEK
COALspot.com: The freight market continued to be buoyant with cape index pushing the BDI.
The BDI was up 10.49% and closed at 1200 points on 7 ...
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- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
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