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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, 29 July 15
Q4' 15 FOB RICHARDS BAY COAL SWAPS DECLINE 4.41% TO $56.52 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
Tuesday, 28 July 15
INDONESIA DELAYS PLAN TO RAISE COAL ROYALTIES AMID PLUNGING PRICE - JP
The government will postpone a plan to increase royalty payments from coal miners as they are already burdened with the commodity’s plunging ...
Tuesday, 28 July 15
API 5 FOB NEWCASTLE COAL SWAP LOST M-M AND GAINED W-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery down $ 1.15 per MT (-2.51%) month over month to US$ 44.62 per mt. The swap ...
Monday, 27 July 15
KOMIPO INVITES BIDS FOR TOTAL 545,000 MT OF COAL FOR BORYEONG POWER PLANT
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to purchase total 545,000 Metric Tons (MT) of coal ...
Monday, 27 July 15
CFR SOUTH CHINA COAL SWAP WEAK M/M; FIRM W/W
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.92 (1.77%) per MT month over month.
A commodity swap ...
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- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Minerals Council of Australia
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- The University of Queensland
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
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