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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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Sunday, 02 November 14
CAPE INDEX WAS UP 46.65% WEEK ON WEEK
COALspot.com: The BDI and Cape index continued the strong upward trend this week. The BDI was up 19.80 pct and Cape index was up by 46.65 per ...
Friday, 31 October 14
BUKIT ASAM'S NET PROFIT ROSE 27.42% FOR THE PERIOD JANUARY - SEPTEMBER 2014
COALspot.com: Publicly listed coal miner Bukit Asam reported solid profits in the first nine months of 2014 year.
Coal miner Bukit Asam manage ...
Friday, 31 October 14
U.S PRODUCED AROUND 19.3 MMST OF COAL IN A WEEK
COALspot.com – United States the world's one of largest coal producers, produced approximately 19.3 million short tons (mmst) of coal in ...
Thursday, 30 October 14
COAL & GRAINS SUPPORT PANAMAX AND IRON ORE SUPPORTS CAPES
Handy
The Atlantic market has been flat this week. Rates are up about US$ 200 from last week on the TA´s, but the volumes are about the sam ...
Thursday, 30 October 14
DOES A LOU ARBITRATION AGREEMENT FOR THE UNDERLYING CARGO CLAIM COMPLETELY REPLACE THE BILL OF LADING ARBITRATION CLAUSE? - INCE &CO
KNOWLEDGE TO ELEVATE
In the context of cargo claims brought under four bills of lading, the Commercial Court has recently considered whether a ...
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- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
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- Trasteel International SA, Italy
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- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
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- Gujarat Mineral Development Corp Ltd - India
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- Minerals Council of Australia
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- IHS Mccloskey Coal Group - USA
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
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- White Energy Company Limited
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- Tamil Nadu electricity Board
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- Ministry of Finance - Indonesia
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- Indonesian Coal Mining Association
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- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
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- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
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- Sindya Power Generating Company Private Ltd
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- Ministry of Transport, Egypt
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- Indian Energy Exchange, India
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- Videocon Industries ltd - India
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- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
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- Sojitz Corporation - Japan
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- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
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- Dalmia Cement Bharat India
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- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Australian Coal Association
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- Power Finance Corporation Ltd., India
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- Vizag Seaport Private Limited - India
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- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Parliament of New Zealand
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- India Bulls Power Limited - India
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- Bulk Trading Sa - Switzerland
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- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
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- Mintek Dendrill Indonesia
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- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
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- Vedanta Resources Plc - India
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- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- London Commodity Brokers - England
- Indogreen Group - Indonesia
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- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
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- Sical Logistics Limited - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Planning Commission, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
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- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
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- Interocean Group of Companies - India
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- Kideco Jaya Agung - Indonesia
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