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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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Friday, 29 May 15
COAL PRODUCTION IN THE U.S. ALMOST FLAT THIS PAST WEEK
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 16.1 million short ...
Friday, 29 May 15
SOUTH KOREAN STATE-OWNED UTILITY KOREA MIDLAND POWER INVITES BIDS FOR 780K MT OF COAL FOR H2' 15
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 780K Metric Tons (MT) of HCV and LCV ...
Thursday, 28 May 15
TIMEBAR FOR DEMURRAGE CLAIMS - SKULD
KNOWLEDGE TO ELEVATE
English law has traditionally had a strict approach to contractually agreed time bars between commercial parties as well ...
Wednesday, 27 May 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Earlier in the year I looked at how the market was reacting to the prolonged fall of the price of oil. Back then it was still unclear if the fallin ...
Tuesday, 26 May 15
HOW HAS THE DROP IN OIL PRICES AFFECTED OTHER COMMODITIES? - CLYDE & CO
KNOWLEDGE TO ELEVATE
The effects of the dramatic drop in the price of both Ice March Brent, the international oil marker, and its US counterpa ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- The University of Queensland
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Meralco Power Generation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- White Energy Company Limited
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
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