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