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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, 03 September 10
NALCO, INDONESIAN FIRM DIFFER ON COAL SUPPLY TO SMELTER - DNA INDIA
A few days ago, National Aluminium Company (Nalco) advertised in Indonesian newspapers asking for companies to bid for coal supplies for its 500,000 ...
Thursday, 02 September 10
PLN ASKED TO USE LOCAL COAL
Tempo Interactive reportd that, the Indonesian Mining Association Executive Director, Priyo Pribadi, has called on the state-run electricity company ...
Thursday, 02 September 10
NALCO OPEN TO EQUITY DILUTION IN $3.9 BN PROJECT IN INDONESIA
Business-Standard reported that, state-owned Nalco today said it is considering selling stake in its $3.9 billion (over Rs 18,000 crore) aluminium p ...
Thursday, 02 September 10
DRY BULK MARKET GAINS MOMENTUM TO INCREASE, WITH CHINA ONCE AGAIN TO THE RESCUE
With predictions from Chinese officials stating that the country’s iron ore imports during 2010 could surpass the record amounts of 2009, the ...
Wednesday, 01 September 10
STC BAGS NTPC ORDER TO SHIP 12 MT COAL
My Digital FC reported that, The State Trading Corporation (STC) has bagged NTPC’s tender to ship 12 million tonnes coal from Ind&sh ...
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- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- White Energy Company Limited
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indonesian Coal Mining Association
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Carbofer General Trading SA - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
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