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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, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- The University of Queensland
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Minerals Council of Australia
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Borneo Indobara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
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