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Sunday, 20 June 10
OUR COAL: ITS DEVELOPMENT AND CONTROVERSIAL ISSUES
 Indonesia’s production of coal has been growing amazingly. In the mid 1980s, national coal production was less than 1 million tons per annum, whereas energy planners (in the fourth Five Year Development Plan: 1989-1994) pointed at 10 million tons as the national production target.
The current production has jumped dramatically, recorded as 237 million tons in 2008 (predicted to achieve 270 million tons this year), making Indonesia a world class producer and the largest exporter of coal around the globe. The skyrocketing growth of our coal production has also incited many controversial issues.
Coal is considered as the dirtiest among fossil fuels, making environmentalists oppose their wide use
as fuel.
However, the proposal for ceasing use of coal — power generation, for instance — would be challenged by power utilities demanding low cost fuel that coal may offer and by the government, which has the responsibility to provide electricity as well as have revenue from exploiting its energy resources.
Despite the world’s rising anxiety of global warming, IEA (International Energy Agency: World Energy Outlook 2009) statistics shows that the world consumption for coal, for the last decade, is still growing the fastest among primary energy sources.
The environmental problem associated with coal in Indonesia is not limited to green houses gases (GHG), but also damage and pollution since its exploitation, transportation and uses to post mining.
It is easy to find where many coal fields are not mined appropriately according to “good mining and environmental practices”, coal transportation is not considering safety standards and is damaging rivers, (public) roads and seashores.
The coal mining has polluted the land, water and air of especially Kalimantan, where more than 90 percent of Indonesia’s coal mining operations take place.
It is sad that many of the previous mining areas have been abandoned without being properly reclaimed, whereas thousands of hectares of the island’s tropical forests have been converted into desert.
The soaring exploitation, including its negative impact on the environment, has a strong correlation with the number of licensing/permits awarded.
The introduction of the 1999 Regional Autonomy Law, subsequently followed by the 1999 Fiscal Balancing Law between the Central and Regional Governments have — to some degree — impacted on the coal licensing regime, where larger authorities had been given to regional/local governments.
Under the new licensing regime by local governments, requirements for coal permits tend to be relaxed whereas monitoring has not been done properly.
As a result, the number of permits (Mining Authorization/KP) has been growing considerably (currently 462, of which 169 are producing), coal production increases, but also environmental problems and the issues of illegal mining exist.
The question of who really owns the KP licenses exists, which was defined as that it can be owned by Indonesian national/companies only.
While the largest part of coal in Indonesia are being produced by large companies (the holders of Coal Contract of Work/PKP2B), some coal is mined by small scale and illegal miners.
It is believed that a significant amount of coal has been produced by illegal miners (some 5 million tons annually) and part has gone to meet export demand.
Wherever in the world, illegal miners lack interest in responsible mining and mine rehabilitation practices. Illegal mining is a problem for potential investors, the environment and government revenues.
The government has introduced measures to crack down on problems, including arresting illegal miners.
However, it cannot be the only solution since illegal mining is actually rooted in underemployment, local poverty and weak law enforcement, while the number of people involved in these activities is quite significant.
An alternative to confrontation to illegal miners by the central government (who awards the large scale PKP2B mining license) should be a cooperative and more comprehensive approach.
“Despite the world’s anxiety of global warming, IEA statistics shows that the world consumption for coal is still growing the fastest among primary energy sources.”
Work together with local/rural governments and communities to reduce poverty, educate/assist the illegal miners to increase their awareness on good mining practices (including mine rehabilitation), provide transition period fiscal incentives to encourage illegal mining toward the regulated mining sector, among others.
It needs to maintain an appropriate balance between the soaring exports of coal (about three quarters of production on average) and the domestic growing demand for the same fuel.
Push for exports is still coming largely from the traditional East Asians (Japan is the largest), while the coal-hungry India and China are also increasing their demand for our coal.
The exports will be competed with by the Blue Print for Energy Management 2005-2025 pointing out that one third of Indonesia’s energy primary energy mix in 2025 is to be supplied by coal, (the current share is about 15 percent).
Even though it is often mentioned that our coal reserves are quite large (current proven reserves of 5.5 billion tons; estimated resources of 105 tones) and that our reserves for coal are much larger than that of oil and gas, we should watch their fast rate of exploitation cautiously.
It needs to recalculate the benefit of exploiting them, taking into account their damage to the environment and what is left post mining. Where have all the revenues from exploiting that coal gone? Is the escalating export not jeopardizing the domestic energy security in the near future?
We have ample experiences, for instance in exploiting the resources-rich Kalimantan. The forests, oil and gas reserves have been exploited for about four to five decades, but it seems that the island has not enjoyed the fruits of the excessive exploitation: the current regional economy remains weak, infrastructure is poor and energy supplies for local uses have not been secured.
It needs to promote the terms “resources balance, depletion, sustainability”, start internalizing the costs of environmental impact and enforce those concepts into workable policies for our coal mining development.
The writer is the senior energy planner and an economist with the National Development Planning Agency. The opinions expressed are his own.
Source: The Jakarta Post ( Hanan Nugroho)
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Thursday, 08 September 11
TRADA MARITIME BUYS GUNUNG BARA UTAMA
Insider Stories reported that, PT Trada Maritime Tbk (TRAM) has purchased convertible bonds issued by PT Awesome Coal from Zakia Limited. The memora ...
Thursday, 08 September 11
PETROSEA ADDS US$730 MIO CONTRACT
Coal mining contractor PT Petrosea Tbk (PTRO), a majority owned subsidiary of energy integrated company PT Indika Energy Tbk (INDY), has secured a U ...
Wednesday, 07 September 11
ANOTHER EXCEPTIONALLY STRONG WEEK FOR THE CAPESIZE MARKET - BRS
The very strong rise in Cape rates pushed through an overall improvement in the BDI this week, although relatively little benefit from the Capes has ...
Wednesday, 07 September 11
INDIA HIT BY INDONESIAS COAL PRICE - TEMPO INTERACTIVE
TEMPO Interactive, an Indonesian online news portal reported that, The Indian government has complained about the price increase of Indonesian coal, ...
Wednesday, 07 September 11
SAMPUR POWER AGREEMENT SIGNED - DAILY NEWS
Daily News, Sri Lank's national news paper reported that, the agreement for the setting up of a 500 MW coal-fired power plant at Sampur, Trincomale ...
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- Semirara Mining and Power Corporation, Philippines
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- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
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- Bangladesh Power Developement Board
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- Eastern Coal Council - USA
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
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- Parliament of New Zealand
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- Indian Oil Corporation Limited
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- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
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- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- The University of Queensland
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- TeaM Sual Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Planning Commission, India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
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