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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, 09 June 15
FOB RICHARDS BAY COAL SWAPS DECLINED M-O-M, W-O-W
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was fell US$ ...
Monday, 08 June 15
SHIPPING FLEET GROWTH HAS STARTED TO SLOW DOWN, AS NEWBUILDINGS AMOUNT TO JUST 329 SHIPS OF ALL TYPES SINCE THE START OF 2015 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Challenging market conditions have led to the inevitable reconsideration of ship owners’ priorities. Uncertainty has been the norm over the p ...
Monday, 08 June 15
API 5 FOB NEWCASTLE COAL SWAPS ADVANCED M-O-M AND W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery increased US$ 0.65 per MT (1.44%) month over month to US$ 45.65 per mt. The ...
Monday, 08 June 15
Q3'15 CFR SOUTH CHINA COAL SWAP ADVANCED 3.51% TO $52.48 PMT THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery rose US$ 1.78 (3.51%) per MT month over month.
A commodity swap is a ...
Sunday, 07 June 15
PANAMAX INDEX ROSE OVER 13% THIS WEEK
COALspot.com: The freight market was up on all segments this past week. The BDI was advanced 3.56% and closed at 610 points. The Cape Index was cli ...
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- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- Central Electricity Authority - India
- Aditya Birla Group - India
- The University of Queensland
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Interocean Group of Companies - India
- PNOC Exploration Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Australian Coal Association
- Parliament of New Zealand
- Carbofer General Trading SA - India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
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