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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, 23 June 15
Q3 FOB INDONESIA COAL SWAP FALL $1.12 IN ONE MONTH
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and week over week, this past week.
The Q3 swap was declined $ ...
Tuesday, 23 June 15
FOB RICHARDS BAY COAL SWAP HAS REMAINED STEADY OVER THE PAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 rose month over month and week over week.
The Q3 swap was up US$ 2.32 ...
Monday, 22 June 15
BORYEONG POWER PLANT TO IMPORT 140K MT OF LCV COAL FOR AUGUST - SEPTEMBER 2015
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to purchase 140K Metric Tons (MT) of LCV coal for ...
Monday, 22 June 15
CFR SOUTH CHINA COAL SWAP: UP MONTH OVER MONTH; DOWN WEEK OVER WEEK
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery rose US$ 0.30 (0.58%) per MT month over month.
A commodity swap is a ...
Monday, 22 June 15
FOB NEWCASTLE COAL SWAP: UP WEEK OVER WEEK AND MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery up $ 0.54 per MT (1.19%) month over month to US$ 45.87 per mt. The swap was ...
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- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- Madhucon Powers Ltd - India
- Coalindo Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Indika Energy - Indonesia
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Kapuas Tunggal Persada - Indonesia
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
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