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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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Monday, 02 March 15
FOB NEWCASTLE COAL SWAP ROSE 6.89% MONTH OVER MONTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.35 per MT (+6.89%) month over month and US$ 0.40 (0.78%) week on ...
Sunday, 01 March 15
BDI INDEX SLIGHTLY UP CAUSED AN INCREASE IN THE PANAMAX, SUPARAMAX AND HANDY SIZE INDICES
COALspot.com: The freight market saw some gains this week and BDI was up 5.26 pct closed at 540 points. However the Cape index failed to follow BDI ...
Friday, 27 February 15
WEEKLY US COAL PRODUCTION DOWN AN ESTIMATED 14.0% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 16.5 million short tons (mmst) of coal ...
Thursday, 26 February 15
DRY BULK MARKET COULD REBOUND FROM HISTORICAL LOWS IN THE COMING WEEKS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market could exit from its historical lows in the coming weeks, as Chinese buyers reenter the market after the holiday celebrations. T ...
Thursday, 26 February 15
COAL POLICY RISK: HIGHER ROYALTIES FOR IUP HOLDERS - BAHANA SECURITIES | JAKARTA POST
The Energy and Mineral Resources Ministry plans to raise coal royalties charged to mining operation permit (IUP) holders by the end of the first qu ...
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- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Tamil Nadu electricity Board
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Xindia Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Vedanta Resources Plc - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- The University of Queensland
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- London Commodity Brokers - England
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
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