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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, 04 December 13
SGX'S MONTHLY VOLUMES REACHED A RECORD HIGH OF 705,000 MT IN NOVEMBER 2013
COALspot.com: SGX has announced that, it monthly volumes have reached a record high of 705 lots (705,000 mt) in November 2013 with month-end open in ...
Tuesday, 03 December 13
PORT OF NEWCASTLE IN QUEENSLAND SHIPPED 1.22 MMT MORE COAL W-W
COALspot.com: In the week ended December 2, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.49 ...
Tuesday, 03 December 13
U.S PRODUCED 900.80 MMST YEAR-TO-DATE
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.7 million short tons (mmst) of coal in ...
Monday, 02 December 13
SUB-BIT INDONESIA COAL SWAP DIFFERENCE BETWEEN Q1 AND Q3 DELIVERIES ARE VERY MARGINAL
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q1’ 14 delivery gained $ 1.67 pmt month on month on Friday 29 Novemb ...
Sunday, 01 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR Q2 AND Q3 DELIVERY SHOWS A DECLINE
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 0.63 percept d-d on Friday 29 November 2013. The CFR South ...
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- Thai Mozambique Logistica
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Leighton Contractors Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- GVK Power & Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Independent Power Producers Association of India
- Parliament of New Zealand
- Planning Commission, India
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
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