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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, 05 May 15
OVERSUPPLY PUTTING INDONESIAN COAL PRICES UNDER PRESSURE
COALspot.com: Indonesian coal swap for delivery Q3 2015 lost week over week and month on month, this past week.
The Q3 swap was declined US$ 1 ...
Tuesday, 05 May 15
FOB RICHARDS BAY COAL SWAPS MOVE NORTH THIS PAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 increased month over month and week over week.
The Q3 swap has increas ...
Monday, 04 May 15
FOB NEWCASTLE COAL SWAP Q1'16 PRICES SLIGHTLY LOWER COMPARED TO Q3'15 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q3’ 2015 delivery gained US$ 1.38 per MT (3.12%) month over month and US$ 0.93 week on week. ...
Monday, 04 May 15
Q1' 2016 CFR SOUTH CHINA THERMAL COAL SWAP CLOSED HIGH THAN 2015 DERIVATIVES
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.15 (-0.29%) per MT month over month and increased US$ 0.07 ...
Sunday, 03 May 15
DRY BULK INDICES WEAKEN SLIGHTLY THIS WEEK
COALspot.com: The freight market was flat to weak for the week starting from 27 April. The BDI was fell around 2.17% closed at 580 points.
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- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- TeaM Sual Corporation - Philippines
- The University of Queensland
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- McConnell Dowell - Australia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- PTC India Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- The Treasury - Australian Government
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
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