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