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