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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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- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Planning Commission, India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
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