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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, 23 June 11
DRY BULK MARKET KEEPS EXHIBITING SIGNS OF WEAKNESS THIS WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems to be unable to climb at new highs this week, showing signs of weakness, across most ship types. Yesterday, the Baltic Dry ...
Wednesday, 22 June 11
BOOMING INDONESIAN COAL EXPORTS - BLEEDING INDIAN POWER INDUSTRY
COALspot.com - Indonesia shipped 28.962 Million tons of coal in May 2011, up by 15.86 percent compared to April export of about 24.995 m ...
Tuesday, 21 June 11
SURGE IN PRODUCTION AND PRICES TO PUSH BUKIT ASAMS NET PROFITS ABOVE RP 3T - THE JAKARTA GLOBE
State-owned coal company Perusahaan Tambang Batubara Bukit Asam expects its net income to increase about 50 percent this year on the back of rising ...
Tuesday, 21 June 11
COURT BATTLE PUTS MASSIVE COAL PROJECT IN JEOPARDY - KOREA JOONGANG DAILY
As Korean companies race to exploit Indonesia’s abundant natural resources, two companies have been locked in a court case that has become so ...
Tuesday, 21 June 11
DRY BULK MARKET TURNS RED AGAIN ON VESSEL OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk entered this week on a negative turn, with the industry’s benchmark the Baltic Dry Index (BDI) retreating by 0.35% to end the ses ...
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- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Interocean Group of Companies - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Mercuria Energy - Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Planning Commission, India
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- McConnell Dowell - Australia
- Parliament of New Zealand
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
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