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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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Saturday, 19 June 10
STRONG DEMAND, RISING PRODUCTION SETTING SCENE FOR COAL BONANZA - THE JAKARTA GLOBE
The Jakarta globe rerported that, As the nation’s coal miners enjoy burgeoning demand from energy-hungry economies such as China and India, th ...
Saturday, 19 June 10
DRY BULK MARKET DOWN ON CHINESE SLOWDOWN FEARS
Dry bulk freight rates have been on a freefall for more than two weeks now, something which has caused the industry’s benchmark, the Baltic Dr ...
Saturday, 19 June 10
COAL INDIA KEEN ON BLOCK DEVELOPMENT IN INDONESIA - THE HINDU BUSINESS LINE
Expanding horizon
Agreement by the Indonesian Government is likely to help CIL gain foothold in India's largest sourcing point of thermal coal.
...
Friday, 18 June 10
THE PANAMAX MARKET CONTINUED ITS SOFTENING TREND - FEARNBULK
Handy
Flat Atlantic markets with most markets in ´slow mode´ due to holidays in China.
Supramax vessels open in the USG are achievi ...
Thursday, 17 June 10
INDONESIAN COAL PRICE REFERENCE FOR JUNE IS US$ 97.22/TON UP 5.59 PERCENT
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has been publishing a monthly coal price reference (HBA) to be us ...
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- Cement Manufacturers Association - India
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- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- The University of Queensland
- Ministry of Mines - Canada
- Minerals Council of Australia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Mintek Dendrill Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Australian Coal Association
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Independent Power Producers Association of India
- The State Trading Corporation of India Ltd
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- ICICI Bank Limited - India
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