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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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Friday, 04 February 11
PERTAMINA DENIES KAREN AGUSTIAWAN RESIGNS FROM PERTAMINA
COALspot.com - The President Director of PT Pertamina, Karen Agustiawan reportedly will replace Darwin Saleh as Minister of Energy and Mineral Resou ...
Friday, 04 February 11
ADARO ENERGY FY10 COAL SALES UP 6 PERCENT TO 43.84 MILLION
As reported by insider stories, Indonesian coal miners PT Adaro Energy Tbk has produced 42.20 million tons of coal in 2010, a 4 percent increase com ...
Thursday, 03 February 11
MERCATOR LINES TO INVEST RS 200-250 CRORE ON COAL MINE IN INDONESIA - ECONOMIC TIMES
Economic Times reported that, Mercator Lines, the HK Mittal-controlled shipping-to-mines major, will invest about 200-250 crore (US$ 43.825 - 54.781 ...
Thursday, 03 February 11
DRY BULK MARKET LOOKS SET TO BOTTOM OUT NIKOS - ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market having lost more than 72% of its value in the last month or so and having retreated to a 2-year low, it seems that the bott ...
Wednesday, 02 February 11
INDONESIA MAY MISS COAL EXPORT TARGET IN 2011
COALspot.com - Indonesian Trade ministry has instructed independent surveyors temporarily not to issue pre-shipment survey report (LS) to the compan ...
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- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
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- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- CIMB Investment Bank - Malaysia
- Cement Manufacturers Association - India
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- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
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- London Commodity Brokers - England
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- Wood Mackenzie - Singapore
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- The State Trading Corporation of India Ltd
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- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
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- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
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- Attock Cement Pakistan Limited
- Planning Commission, India
- MS Steel International - UAE
- Altura Mining Limited, Indonesia
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Coal and Oil Company - UAE
- The University of Queensland
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
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- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
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- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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- Coalindo Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- New Zealand Coal & Carbon
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- IEA Clean Coal Centre - UK
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- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
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- Energy Link Ltd, New Zealand
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- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Ambuja Cements Ltd - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
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- White Energy Company Limited
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- Maheswari Brothers Coal Limited - India
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- Tata Chemicals Ltd - India
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- Bhatia International Limited - India
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- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
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- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
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- Electricity Authority, New Zealand
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