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