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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, 23 December 14
Q4'15 FOB RICHARDS BAY COAL SWAPS FALL $ 3.85 IN A MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 2.13 (-3.17%) month on month ...
Tuesday, 23 December 14
SHIPOWNERS ARE FINALIZING MORE DEALS AS YEAR END COMES CLOSER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS WORLDWIDE
With the 2014 year just a few days before waving goodbye, shipowners are looking to close their pending deals in both the newbuilding and S&P m ...
Monday, 22 December 14
Q2'15 CFR SOUTH CHINA COAL SWAP CLOSED $ 0.30 LOWER THAN Q1'15 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 3.67 (-5.81%) month over month and US$ 0.35 (-0.58%) ...
Monday, 22 December 14
API 5 FOB NEWCASTLE COAL SWAPS ARE HEADING SOUTH
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 1.71 per MT (-3.24%) and closed at US$ 51.02 on 19 December month ...
Sunday, 21 December 14
PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA FALLS FURTHER
COALspot.com: The BDI continued its fall as cape index lost heavily week on week.
The BDI was down 6.95 percent week over week and closed at 8 ...
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- PTC India Limited - India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- The University of Queensland
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Parliament of New Zealand
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Sree Jayajothi Cements Limited - India
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
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