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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, 29 April 14
Q4 SUB-BIT INDONESIA COAL SWAP CLOSED US$ 1.07 HIGHER COMPARED TO Q2 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for average Q2’ 2014 gain on month and on week according to AsiaClear OTC coal swap's reports rele ...
Tuesday, 29 April 14
NEWCASTLE SHIPPED 3.03 MILLION TONS WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 28 April 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensl ...
Tuesday, 29 April 14
Q2 API 8 CFR SOUTH CHINA COAL SWAP LOST 0.29% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 0.29 percent month on month and closed at US$ 75.43 per mt as o ...
Monday, 28 April 14
CHINA LIKELY TO FALL SHORT OF NUCLEAR POWER TARGETS AT 175GW OF CAPACITY BY 2030 - WOOD MACKENZIE
Coal will remain dominant supply at 64% of power mix
Wood Mackenzie forecasts that China will not meet its environmentally-driven, government ...
Sunday, 27 April 14
INDONESIA TO INDIA FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK
COALspot.com: The freight market seems to have bottomed out and saw some marginal gains in all segments, said Capt. Reddy of Vistaar Shipping In ...
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- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- VISA Power Limited - India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- The University of Queensland
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- PTC India Limited - India
- Parliament of New Zealand
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
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