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