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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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Tuesday, 13 April 10
CHINA COAL SEEING 'STRONG DEMAND,' PUDA COAL CFO SAYS - BUSINESS WEEK
Business Week reported that, China coal prices will increase this year as the nation’s industry expands and a drought in the southwest region ...
Tuesday, 13 April 10
PEABODY, COAL INDIA CONFIRM 'EARLY STAGE' TALKS - MINING WEEKLY
Mining Weekly reported that, US coal-miner Peabody Energy is holding discussions with Coal India, the company said on Monday, after an Australian ne ...
Tuesday, 13 April 10
ANGLO PREDICTS HIGH COAL PRICES, STEADY SUPPLY
Busrep / Reuters reported that, Coal prices were expected to remain strong this year, while exports would match last year's despite rail cons ...
Tuesday, 13 April 10
THE PANAMAX MARKET CONTINUED TO STRENGTHEN - BRS DRY BULK
Panamax rates continue to beat the market, and the Panamax 4TC is now trading at a 25% premium to the Cape 4TC — the biggest margin since the ...
Monday, 12 April 10
INDIA'S NALCO TO INVEST BIG IN INDONESIA'S ALUMINIUM PROJECT - BERNAMA
Bernama reported that, India's state- owned National Aluminium Company Ltd (Nalco) is to pump in massive investment to set up a aluminium smelter a ...
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- Semirara Mining Corp, Philippines
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
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- Global Business Power Corporation, Philippines
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- Chamber of Mines of South Africa
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- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
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- VISA Power Limited - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
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- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Trasteel International SA, Italy
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
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- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
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