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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, 23 July 10
KOWEPO TO IMPORT ADDITIONAL 1.2 MILLION TONS OF INDONESIAN COAL WITHIN 5 MONTHS
Korea Western Power Company Limited has finalized around 1.2 million tonnes of Indonesian origin of coal last week. According to K ...
Friday, 23 July 10
THE PANAMAX MARKET HAS CONTINUED ITS SLOW CLIMB - FEARNLEYS
Handy
Continued flat Atlantic markets and over-supply of tonnage across all segments on spot basis. Nevertheless there is more fresh enquiry on Co ...
Friday, 23 July 10
KPMG INDIA FACES COAL DEFICIT OF 50% OF EXPECTED POWER PLANT DEMAND, SAYS - BLOOMBERG
Bloomberg reported that, India may face a coal shortfall of 189 million metric tons a year by 2015, about 50 percent of the power sector’s exp ...
Thursday, 22 July 10
BERAUS IPO NEXT MONTH CAN BECOME THE LARGEST THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesia’s fifth largest coal miner PT Berau Coal Energy Tbk will launch its initial public offering (IPO) ne ...
Thursday, 22 July 10
DRY BULK MARKET EDGES HIGHER, BUT RECOVERY IS SLOW
The dry bulk market’s recovery, which started last Friday has sustained its momentum thus far, but the pace of it seems to be an agonizing one ...
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- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- The University of Queensland
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- Australian Coal Association
- Sakthi Sugars Limited - India
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Heidelberg Cement - Germany
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Bhushan Steel Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Parliament of New Zealand
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
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