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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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Wednesday, 28 January 15
CAPES CONTINUED THEIR UPWARD MOVEMENT LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market displayed a mirror performance of that of the week prior, with the Capesize market correcting further upwards and ...
Tuesday, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
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 fell ...
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- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- VISA Power Limited - India
- Edison Trading Spa - Italy
- Toyota Tsusho Corporation, Japan
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
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