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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, 02 December 14
U.S WEEKLY COAL PRODUCTION FELL 1.4% WEEK ON WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.6 million short tons (mmst) o ...
Tuesday, 02 December 14
FOB RICHARDS BAY COAL SWAPS LOST MONTH OVER MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month, week on week and day over day.
The Q1 swap has lost U ...
Tuesday, 02 December 14
SUB-BIT FOB INDONESIA COAL Q1' 15 DELIVERY SWAP CLOSED AT US$ 49.50
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 0.4 ...
Monday, 01 December 14
SGX'S FOB NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 52.50
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.50 on 28 November after losing US$ 1.20 (-2.23%) month ove ...
Monday, 01 December 14
Q2' 15 DELIVERY CFR SOUTH CHINA COAL SWAP CLOSED 0.42% LOWER THAN Q1' 15 DELIVERY CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 2.45 (-3.78%) month over month and US$ 0.67 (-1.06%) we ...
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- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Economic Council, Georgia
- Chamber of Mines of South Africa
- The University of Queensland
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
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