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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, 05 February 15
ULTRAMAX LEVELS FROM INDIA TO CHINA IN THE MID US$ 5000'S - FEARNLEYS AS
Handy
Despite the overall weak sentiment, there is a scent of optimism in the Atlantic market for ppt dates. Continent is still struggling with o ...
Wednesday, 04 February 15
MARKET INSIGHT - LINOS KOGEVINAS
It has been just about over 2 months since, in a move that surprised many and caused widespread apprehension, OPEC decided to maintain its producti ...
Tuesday, 03 February 15
Q1'15 FOB INDONESIA COAL SWAP CLOSED $ 3.29 HIGHER COMPARED TO Q4'15 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 rose week over week and month on month.
The Q1 swap up US$ 0.68 (+1.41%) month o ...
Tuesday, 03 February 15
FOB NEWCASTLE COAL SWAP FOR Q4 DELIVERY CLOSED 5.86% LOWER THAN Q1 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery rose US$ 0.26 per MT (+0.51%) week over week and declined US$ 0.02 (-0.04%) ...
Monday, 02 February 15
API 4 FOB RICHARDS BAY COAL SWAP ROSE WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has decli ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Planning Commission, India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Bharathi Cement Corporation - India
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