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