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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, 09 September 14
WEAK M&A DESPITE ABUNDANT DISTRESSED INDONESIA COAL ASSETS - FITCH RATINGS
COALspot.com: Fitch Ratings says that a meaningful level of merger and acquisition (M&A) activity leading to a consolidation of the coal sector ...
Tuesday, 09 September 14
PORT OF NEWCASTLE SHIPPED 13.207 MTN OF COAL IN AUGUST; TRADE VALUE AROUND $1.17 BILLION
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.17 billio ...
Monday, 08 September 14
SUB-BIT FOB INDONESIA COAL SWAP UNDERPERFORMED LAST WEEK
COALspot.com: Indonesian coal swaps for average October 2014 decreased US$ 0.20 (-0.39%) day on day and US$ 1.60 (-3.04%) per mt week on week. The ...
Monday, 08 September 14
API 8 CFR SOUTH CHINA COAL SWAP FOR DELIVERY JAN'15 CLOSED AT US$ 66.30 PMT W/E 5 SEPTEMBER 2014; LOST 5.15% M-O-M
COALspot.com: API 8 CFR South China Coal swap for delivery in October 2014 decreased US$ 0.15 (-0.23%) day on day and US$ 2.05 (-3.04%) week on wee ...
Monday, 08 September 14
CHINESE IRON ORE IMPORT DEMAND VERY STRONG - COMMODORE
COALspot.com: 30 dry bulk vessels were chartered in the spot iron ore market last week to haul iron ore import cargoes to Chinese buyers.
Acco ...
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- IHS Mccloskey Coal Group - USA
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- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Samtan Co., Ltd - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
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