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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, 07 April 15
SUB-BIT FOB INDONESIA COAL SWAP KEEPS DROPPING; DROPPED 2% W-W
COALspot.com: Indonesian coal swap for delivery Q2 2015 declined month on month and week over week.
The Q2 swap was declined US$ 2.44 (5.14%) ...
Tuesday, 07 April 15
Q3 FOB RICHARDS BAY COAL SWAP CLOSED AT $ 55.96 PMT; DOWN 8.40% M-M
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has declined U ...
Monday, 06 April 15
INDONESIA'S HBA FIXED AT US$ 64.48 PMT FOR APRIL DELIVERY; DOWN 4.84% M-M
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal benchmark prices to US$ 64.48 per MT in Apr ...
Monday, 06 April 15
FOB NEWCASTLE COAL SWAP DECLINED 12% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 6.23 per MT (-12%) month over month and US$ 0.86 (-1.85%) week ...
Monday, 06 April 15
CFR SOUTH CHINA COAL SWAP FALL CONTINUES
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 5.96 (-10.37%) per MT month over month and US$ 0.98 (- ...
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- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Economic Council, Georgia
- White Energy Company Limited
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Indian Energy Exchange, India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
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