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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, 28 June 10
REVISIONS SHOULD AIM MINERAL AND COAL LAW
VIVAnews reported that, the Consortium of Mineral, Coal and Geothermal-Producing Regional Governments (Minerbapabum) is asking the government to per ...
Monday, 28 June 10
MEC TO INK COAL-EQUITY SWAP DEALS WITH POWER PROJECTS
Business Line reported that, First it was power producers moving to pick up stakes in coal mining projects to ensure the raw material supplies.
N ...
Monday, 28 June 10
COLOMBIA WILL LIKELY EXPORT 80 MILLION TONNES OF COAL IN 2010
Best Colombia reported that, Mr Hernan Martinez energy and mines minister of Colombia told reporters that Colombia will likely export 80 million ton ...
Monday, 28 June 10
WESFARMERS' SEPT QTR COAL PRICE UP 11% - SMH
SMH reported that, Wesfarmers Ltd says it expects a 11 per cent increase in prices for metallurgical coal from its Curragh mine in Queensland in the ...
Saturday, 26 June 10
THE SUPRAMAX INDEX FOR S6 ROUTE WAS UP BY US$ 1091 PER DAY OR 5.7 PERCENT D-O-D -- VISTAAR
COALspot.com: The market appears to be steadying with all indices almost stabilizing and the drop much less than last two weeks.
The BDI softened ...
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- Simpson Spence & Young - Indonesia
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- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
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- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
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- Ministry of Transport, Egypt
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- Attock Cement Pakistan Limited
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- Toyota Tsusho Corporation, Japan
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- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
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- Minerals Council of Australia
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- New Zealand Coal & Carbon
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- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
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- CIMB Investment Bank - Malaysia
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- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
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- Holcim Trading Pte Ltd - Singapore
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Planning Commission, India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
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- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
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- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
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- Kepco SPC Power Corporation, Philippines
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- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
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- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
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- The University of Queensland
- Semirara Mining Corp, Philippines
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