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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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Monday, 13 October 14
NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 54.92, SGX DATA SHOWS
COALspot.com: API 5 FOB Newcastle Coal swap for delivery Q4' 2014 decreased US$ 0.80 (-1.46%) month over month and US$ 0.52 (-0.95%) week over ...
Monday, 13 October 14
INDONESIAN COAL SWAPS FOR DELIVERY Q4' 2014 GAINED WEEK ON WEEK AND DAY ON DAY
COALspot.com: Indonesian coal swaps for delivery Q4' 2014 gained week on week and day on day.
The swap lost US$ 0.13 (-0.25%) month on mon ...
Monday, 13 October 14
Q1' 2015 CFR SOUTH CHINA COAL SWAP CLOSED US$ 0.31 PMT HIGHER THAN Q4' 2014 CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 0.66 (-1.00%) month over month and US$ 0.40 (-0.61%) ...
Sunday, 12 October 14
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO BE WEAK - VISTAAR
COALspot.com: This week all the segments softened. The BDI down 7.13 pct week on week and closed below 1000 points at 963 points.
The Cape ind ...
Saturday, 11 October 14
COAL PRODUCTION RISES ONLY SLIGHTLY AS GOVT LIMITS MINING OPERATIONS - THE JAKARTA POST
Indonesian coal production rose by only 4 percent in the first nine months of this year, a relatively low increase compared to previous years, as t ...
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- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Eastern Coal Council - USA
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- India Bulls Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- CNBM International Corporation - China
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