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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, 11 November 14
PORT OF NEWCASTLE'S OCTOBER COAL SHIPMENTS SLIPPED 7.40% M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1,115.7 mil ...
Monday, 10 November 14
Q4' 15 FOB INDONESIA COAL SWAP CLOSED LOWER THAN Q1' 15 CLOSING PRICE OF US$ 49.58 ON LAST FRIDAY
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week on week and day on day.
The Q1 swap has lost just US$ ...
Monday, 10 November 14
SGX'S API 4 FOB RICHARDS BAY COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 65.44 ON 7 NOV, LOST 4.08% M-O-M
COALspot.com: API 4 FOB Richards Bay Coal swap for Q1’ 2015 delivery has decreased US$ 2.78 (-4.08%) month over month and US$ 1.41 (-2.11%) w ...
Monday, 10 November 14
MOZAMBIQUE SIGNED CONTRACT WITH ETA STAR OF UAE FOR OPEN CAST COAL MINE IN TETE - AIM
- ETA Star to build slurry pipeline over the 600 kilometers to Beira in Mozambique to transport coal.
- The viability studies show the presence o ...
Monday, 10 November 14
YEAR 2015 CFR SOUTH CHINA COAL SWAP SHOWS A WEAK TREND THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 3.74 (-5.63%) month over month and US$ 2.19 (+3.37%) we ...
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- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Economic Council, Georgia
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- PTC India Limited - India
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
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