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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, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fu ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mi ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
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- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
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- Siam City Cement - Thailand
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- Bangladesh Power Developement Board
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- International Coal Ventures Pvt Ltd - India
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- Australian Coal Association
- Parliament of New Zealand
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- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
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- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Bulk Trading Sa - Switzerland
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- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
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- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
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- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
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- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
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- The University of Queensland
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- GAC Shipping (India) Pvt Ltd
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
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- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Sojitz Corporation - Japan
- London Commodity Brokers - England
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
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- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
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- Malabar Cements Ltd - India
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- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Thai Mozambique Logistica
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
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- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
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- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
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