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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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Thursday, 02 April 15
NEWBUILDING ORDERS FOR DRY BULK CARRIERS "DRY" UP
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Wednesday, 01 April 15
SUPRAMAX & HANDY: RATES HELD STEADY TOWARDS THE WEEKEND
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Wednesday, 01 April 15
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There is no doubt that we are still witnessing a very challenging and at the same time very uncertain market, both with respect to dry chartering a ...
Wednesday, 01 April 15
Q4' 15 INDONESIA COAL SWAP CLOSED AT $45.15 W/E 27 MARCH 2015
COALspot.com: Indonesian coal swap for delivery Q2' 2015 drops month on month and week over week.
The Q2 swap declined US$ 1.54 (3.24%) mo ...
Tuesday, 31 March 15
RICHARDS BAY COAL SWAPS GAIN WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month but increased week on week.
The Q2 swap has ...
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- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- The University of Queensland
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Planning Commission, India
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- White Energy Company Limited
- Minerals Council of Australia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Marubeni Corporation - India
- Energy Development Corp, Philippines
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