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