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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, 14 April 15
COAL OUTPUT FALLS AS PRICES CONTINUE TO LAG - JP
Coal output dropped by 21 percent in the first three months of the year as low prices for the commodity forced mining companies to reduce activitie ...
Tuesday, 14 April 15
SUB-BIT FOB INDONESIA COAL SWAPS FOR Q4 DELIVERY CRASHES THROUGH $44
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.25 (4.77%) ...
Monday, 13 April 15
Q2 FOB NEWCASTLE COAL SWAP CLOSED AT $45.28 PMT; DECLINED 7.50% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.67 per MT (-7.50%) month over month and US$ 0.39 week on wee ...
Monday, 13 April 15
Q4 CFR SOUTH CHINA COAL SWAP CLOSED AT US$ 50.97
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.50 (-8.05%) per MT month over month and US$ 0.12 (-0 ...
Sunday, 12 April 15
INDONESIA TO INDIA FREIGHT RATE IS EXPECTED TO BE SOFT
COALspot.com: The freight market was steady, however the BDI was declined slightly week over week.
BDI dropped 1.36 pct and closed at 580 poin ...
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- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Bhatia International Limited - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Price Waterhouse Coopers - Russia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- The University of Queensland
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Aditya Birla Group - India
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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