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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, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
Tuesday, 10 February 15
SUB-BIT FOB INDONESIA COAL SWAP ADVANCES 3.79% WEEK ON WEEK
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 0.85 (+1.81%) month o ...
Tuesday, 10 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK OVER WEEK, RAISING HOPES?
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 0.95 per MT (+1.91%) week over week and declined US$ 0.06 (-0.12%) ...
Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ...
Monday, 09 February 15
FOB RICHARDS BAY COAL SWAP GAINS 3.65% TO ONE-MONTH HIGH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and day on day.
The Q2 swap has soared US$ 2.1 ...
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- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
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- Goldman Sachs - Singapore
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- The Treasury - Australian Government
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- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
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