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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, 17 May 10
S. AFRICA CUTS EUROPE COAL SUPPLY, ASIA SALES RISE, TRADER SAYS - BLOOMBERG
Bloomberg reported that, South Africa’s Richards Bay Coal Terminal, Europe’s biggest source of the fuel burned for power, cut shipments ...
Monday, 17 May 10
GREEK CRISIS TO SEE FREIGHT RATES FALL BANGKOK POST
The Greek debt crisis will likely cause shipping rates to fall this quarter enabling SET-listed Precious Shipping Plc to buy second-hand vessels at ...
Monday, 17 May 10
NEWCASTLE COAL QUEUES COULD BE HISTORY - THE HERALD
NEWCASTLE'S infamous coal queues could be a thing of the past if a plan to have the ships anchor over the horizon succeeds against the doubts of it ...
Sunday, 16 May 10
THREE FIRMS SHORTLISTED FOR CIL'S $ 2BN OVERSEAS PROJECTS - ECONOMIC TIMES
Economic Times reported that, State-owned Coal India Ltd (CIL) has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/S ...
Sunday, 16 May 10
INDIKA ENERGY & COAL ASSETS EXPANSION
Insider stories reported that, PT Indika Energy Tbk (INDY) has three portfolio coal assets, PT Kideco Jaya Agung, coal asset in East Kalimanta ...
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- Intertek Mineral Services - Indonesia
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- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
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- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
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- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- New Zealand Coal & Carbon
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- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
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- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
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- Interocean Group of Companies - India
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- SMC Global Power, Philippines
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Bhatia International Limited - India
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- Xindia Steels Limited - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
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- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
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- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Bhoruka Overseas - Indonesia
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
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