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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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Tuesday, 07 July 15
FOB NEWCASTLE COAL SWAP ADVANCED MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery up $ 0.28 per MT (-0.61%) month over month to US$ 45.85 per mt. The swap wa ...
Monday, 06 July 15
KOREA MIDLAND POWER COMPANY LIMITED ISSUED A TENDER FOR 250K MT BITUMINOUS COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 250K Metric Tons (MT) of 5300 kcal/kg NAR coal ...
Monday, 06 July 15
COAL TRADING & RISK MANAGEMENT TRAINING COURSE
Are you ready to invest in yourself and take your trading and risk management strategy to the next level? The Coal Trading & Risk Management Tr ...
Monday, 06 July 15
CFR SOUTH CHINA COAL SWAP; DECLINED D-O-D,W-O-W AND M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.53 (1.01%) per MT month over month.
A commodity swap ...
Sunday, 05 July 15
THE BALTIC DRY INDEX WAS DOWN 18%; PANAMAX UP 9%
COALspot.com: The freight market was soft during this week. However indices closed slightly firmer end of the week on 3rd July.
The BDI was do ...
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- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Trasteel International SA, Italy
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- PTC India Limited - India
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Planning Commission, India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Central Electricity Authority - India
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- MS Steel International - UAE
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
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