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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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Tuesday, 09 November 10
NOBLE GROUP APPOINTED AS THE EXCLUSIVE MARKETING AGENT FOR PT. BERAU COAL
COALspot.com: Noble Group Limited has recently been appointed as the exclusive marketing agent for PT. Berau Coal production exported to internation ...
Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
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- Mercator Lines Limited - India
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- Mintek Dendrill Indonesia
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- Holcim Trading Pte Ltd - Singapore
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- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
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- Bulk Trading Sa - Switzerland
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- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
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- Wood Mackenzie - Singapore
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- White Energy Company Limited
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- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Interocean Group of Companies - India
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- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
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- Directorate General of MIneral and Coal - Indonesia
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- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
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- Parliament of New Zealand
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- Malabar Cements Ltd - India
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- The University of Queensland
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- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Deloitte Consulting - India
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- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
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- Videocon Industries ltd - India
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- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
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- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
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- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
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- Kapuas Tunggal Persada - Indonesia
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- Singapore Mercantile Exchange
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- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
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- SMC Global Power, Philippines
- Kobexindo Tractors - Indoneisa
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- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Planning Commission, India
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- MS Steel International - UAE
- Carbofer General Trading SA - India
- PTC India Limited - India
- Australian Coal Association
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- Jaiprakash Power Ventures ltd
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- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
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- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
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- Sindya Power Generating Company Private Ltd
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- San Jose City I Power Corp, Philippines
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- South Luzon Thermal Energy Corporation
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