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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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Wednesday, 26 May 10
ADANI GROUP EYES AFRICA FOR COAL MINING PROJECTS
India Info Line reported that, After acquiring coal mines for importing Indonesian coal to run its thermal power plants in the country, the Adani Gr ...
Wednesday, 26 May 10
DRY BULK MARKET SHOOTS UP, CLOSES IN ON POST-CRISIS ERA HIGHS
In an opposite trend than that of the previous week, the Baltic Dry Index (BDI), a benchmark for tracking costs to haul commodities at sea, shot up ...
Wednesday, 26 May 10
BUMI TO CUT UP TO USD 1 BILLION DEBT IN 12 MONTHS
Press Release : PT Bumi Resources Tbk. announced yesterday that it has revived its intent to issue non preemptive shares and added this to the agend ...
Tuesday, 25 May 10
COAL PRODUCTION MAY REACH 320 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce as much as 320 million tons of coal this year, an increase of nearly 7 perc ...
Tuesday, 25 May 10
KALIMANTAN COAL RAIL PROJECT RUNS INTO COST DELAY - THE JAKARTA GLOBE
The Jakart globe reported that, A$1.5 billion coal rail and port project planned for Central Kalimantan may be delayed by a year after a review of t ...
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- GMR Energy Limited - India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Energy Development Corp, Philippines
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
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- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- New Zealand Coal & Carbon
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- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
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- McConnell Dowell - Australia
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- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
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- LBH Netherlands Bv - Netherlands
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- Mintek Dendrill Indonesia
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- London Commodity Brokers - England
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- Toyota Tsusho Corporation, Japan
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- Indian Energy Exchange, India
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- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
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- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
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- Bulk Trading Sa - Switzerland
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- Borneo Indobara - Indonesia
- Aboitiz Power Corporation - Philippines
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
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- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
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- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
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- IHS Mccloskey Coal Group - USA
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- White Energy Company Limited
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- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Videocon Industries ltd - India
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- AsiaOL BioFuels Corp., Philippines
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- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
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- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
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