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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, 01 July 15
BEIJING HAS OFFICIALLY EXTENDED BY TWO YEARS ITS SUBSIDY PROGRAM TO SUPPORT LOCAL SHIPPING COMPANIES IN SCRAPPING THEIR OLD TONNAGE - INTERMODAL
Last week, Beijing has officially extended by two years its subsidy program to support local shipping companies in scrapping their old tonnage in w ...
Tuesday, 30 June 15
Q1'16 FOB INDONESIA COAL SWAP CLOSED $ 43.45 PER MT
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and flat week over week, this past week.
The Q3 swap was decli ...
Monday, 29 June 15
CFR SOUTH CHINA COAL SWAPS UP SLIGHTLY MONTH OVER MONTH
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery rose US$ 0.57 (1.11%) per MT month over month.
A commodity swap is a ...
Monday, 29 June 15
FOB NEWCASTLE COAL SWAP SLIGHTLY UP MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery up $ 0.49 per MT (1.08%) month over month to US$ 45.77 per mt. The swap was ...
Saturday, 27 June 15
THE FREIGHT MARKET WAS STEADY EARLIER IN THE WEEK; SOFTEN INTO WEEK'S END
COALspot.com: The freight market remain steady earlier in the week, but towards end of the week BDI and BCI shows some signs of softening.
The ...
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- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
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