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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, 28 April 15
Q2' 15 FOB RICHARDS BAY COAL SWAP CLOSED 4.18% HIGHER FROM MONTH AGO
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 increased month over month and slightly week over week.
The Q2 swap ha ...
Monday, 27 April 15
U.S. COAL PRODUCTION FELL BELOW ONE BILLION SHORT TONS IN 2013 - EIA
COALspot.com: For the first time in two decades, U.S. coal production fell below one billion short tons to 984.8 million short tons in 2013 from 1, ...
Monday, 27 April 15
Q3' 2015 FOB NEWCASTLE COAL SWAP CLOSED 3.69% LOWER THAN Q2' 2015 PRICE OF $46.36
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery gained US$ 0.19 per MT (0.41%) month over month and US$ 0.78 week on week. ...
Monday, 27 April 15
CFR SOUTH CHINA COAL SWAP SLOWLY IMPROVED THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 0.74 (-1.41%) per MT month over month and increased US$ 0.43 ...
Sunday, 26 April 15
DRY BULK MARKET KEPT IMPROVING THIS WEEK; CAPES AND PANAMAXES SHOW A SLIGHT PICKUP IN RATES
COALspot.com: The freight market was stable this week as BDI closed at 600 points after improving 0.50 percent week over week.
The cape ...
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- Coal and Oil Company - UAE
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- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- San Jose City I Power Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mercuria Energy - Indonesia
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Dalmia Cement Bharat India
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