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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, 22 July 15
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS | INTERMODAL
In both bulk shipping sectors, there are certain, yet different, reasons and strategies to invest. In the wet, buy once you can charter-out long, w ...
Tuesday, 21 July 15
CHINA'S ENERGY COMMODITY IMPORTS DIVERGING - RICHARD SCOTT | HELLENIC SHIPPING NEWS
Energy commodity imports into China have grown enormously over the past decade, boosting global demand for shipping capacity. But a dramatic change ...
Tuesday, 21 July 15
FOB INDONESIA COAL SWAPS EXTEND LOSS
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and week over week, this past week. The swaps was lost 0.70%.
...
Tuesday, 21 July 15
Q4'15 FOB RBCT COAL SWAP DECLINES NEARLY 3.13 PER CENT MONTH OVER MONTH
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$ ...
Monday, 20 July 15
FOB NEWCASTLE COAL SWAP SEE FURTHER DECLINES
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery down $ 1.32 per MT (-2.89%) month over month to US$ 44.43 per mt. The swap ...
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- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Trasteel International SA, Italy
- Planning Commission, India
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Baramulti Group, Indonesia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- MS Steel International - UAE
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- The University of Queensland
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
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