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