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