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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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Wednesday, 29 October 14
GOOD REASON WHY Q4 CAPESIZE OUTLOOK WAS SO BULLISH AT START OF THE YEAR - COMMODORE RESEARCH
COALspot.com: There was good reason why so many analysts' capesize outlook for Q4 was so very strong at the start of this year. Brazilian ...
Tuesday, 28 October 14
SGX'S FOB RICHARDS BAY COAL SWAP FOR DELIVERY Q1' 2015 CLOSED AT $ 68.07 ON 24 OCT
COALspot.com: API 4 FOB Richards Bay coal swap for Q4’ 2014 delivery decreased US$ 0.65 (-0.96%) month over month and increased US$ 1.79 (+2. ...
Tuesday, 28 October 14
SUB-BIT FOB INDONESIA COAL SWAP FOR Q1' 15 DELIVERY CLOSED 3.68% LOWER MONTH ON MONTH
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 lost month on month and gained day on day and week on week.
The swap has lost US ...
Monday, 27 October 14
GOVT PROMISES TO EASE LICENSING PROCEDURES IN MINING SECTOR - THE JAKARTA POST
The Energy and Mineral Resources Ministry’s directorate general for mineral and coal plans to simplify the complicated licensing procedures i ...
Monday, 27 October 14
FOB NEWCASTLE COAL SWAP FOR Q1' 15 DELIVERY CLOSED $ 0.10 LESSER THAN Q4' 14 CLOSING OF $ 53.27 PMT
COALspot.com: API 5 FOB Newcastle Coal swap for Q4’ 2014 delivery decreased US$ 1.43 (-2.61%) month over month and increased US$ 0.05 (+0.09% ...
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- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- The University of Queensland
- Planning Commission, India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Romanian Commodities Exchange
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Bhatia International Limited - India
- Deloitte Consulting - India
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Attock Cement Pakistan Limited
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