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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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Monday, 13 September 10
CIL IN TALKS WITH SHIPPING CORP TO FORM JV FOR COAL IMPORTS
Shipping Corporation of India, the largest domestic shipping liner, may form a joint venture with Coal India for coal imports, a top company officia ...
Monday, 13 September 10
FREIGHT MARKETS MAY BE A BIT SOFT THIS WEEK - VISTAAR SINGAPORE
COALspot.com: The freight market continued its upward trend with the BDI almost touching 3000 points. However the uncertainty seems to continue with ...
Friday, 10 September 10
INDONESIAN RAILWAY CONTRACT STILL UP FOR BIDDING - LOGISTICS WEEK
The tender process for a $2.2bn project to build a coal-transporting railway line in Central Kalimantan province, Indonesia, is still underway and n ...
Friday, 10 September 10
WCI INTO CHINA WITH IRON ORE ARE AIMING AROUND $ 20K - FEARNBULK
Handy
The rates are firm in every corner of the world. However it still looks Atlantic/Baltic/Black Sea offer better employment opportunities for ...
Thursday, 09 September 10
INDIANS BALCO TO BUY 50 K OF 3,000 TO 4,500 GAR CALORIFIC VALUE COAL
COALspot.com: Bharat Aluminium Company Limited (BALCO) is a subsidiary of Sterlite Industries (India) Limited and part of Vedanta Resources PLC, a L ...
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- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- White Energy Company Limited
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
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