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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, 07 January 11
SRI LANKA NEW PORT TO OFFER SHIP FUEL IN MAY - LBO
LOB reported that, The Sri Lanka Ports Authority (SLPA) plans to start bunkering or ship fuel operations at a new port in southern Hambantota in May ...
Friday, 07 January 11
DRY BULK MARKET ON A FREEFALL, AS THE NEW YEAR EARLY DAYS DONT BRING MANY CHEERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market is facing its worst slump in more than two years, falling by 4.75% yesterday to reach 1,544 points, on top of an additional 4.2% ...
Thursday, 06 January 11
OVERSEAS & GENERAL SIGNS AGREEMENT TO EXPAND FOOTPRINT ON COAL LEASE IN INDONESIA - PROACTIVE INVESTORS
Proactive Investors reported that, Overseas & General (ASX: OGL) has entered into a joint operating agreement on the Jambi Coal Lease in Sumatra ...
Thursday, 06 January 11
BANPU EXPECTS ROSY 2011 AS COAL PRICES SKYROCKET - BANGKOK POST
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, expects minimal impact from the production stoppage at its Daning mine in China ...
Thursday, 06 January 11
COKING COAL CONTRACT PRICE MAY RISE 33% ON AUSTRALIAN FLOODS - BLOOMBERG
Bloomberg reported that, Steelmakers in Asia may be forced to pay as much as 33 percent more for hard coking coal after the worst floods in 50 years ...
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- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
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