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