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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, 26 August 14
GOVT ON TRACK TO LIMIT COAL OUTPUT - THE JAKARTA POST
The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the envir ...
Monday, 25 August 14
4TH ANNUAL FLOATING TERMINALS
4th Annual Floating Terminals
18-20 Nov 2014
Intercontinental Jakarta Midplaza,
Indonesia
Web Site
The Floating Terminal c ...
Monday, 25 August 14
THE BALTIC DRY IS JUMPING, BUT DON'T DRAW ANY BROAD CONCLUSIONS - NASDAQ
Those who consistently preach doom and gloom and see an economic apocalypse around every corner would make me laugh if it weren’t for the fac ...
Monday, 25 August 14
COAL CEOS: DEMISE OF COAL 'EXAGGERATED' - MARK WILCOX
By Mark Wilcox
Heads of some of the largest coal companies in Wyoming are saying the demise of coal has been exaggerated, though the industry def ...
Monday, 25 August 14
INDO COAL SWAPS W-O-W: NEGATIVE; M-O-M: POSITIVE
COALspot.com: Indonesian coal swaps for average September 2014 decreased US$ 0.15 (-0.28%) day on day and US$ 0.65 (-1.19%) per mt week on week. Th ...
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- Goldman Sachs - Singapore
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- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
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- Thiess Contractors Indonesia
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- MS Steel International - UAE
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- Parliament of New Zealand
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- Thai Mozambique Logistica
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- Alfred C Toepfer International GmbH - Germany
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- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
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- Carbofer General Trading SA - India
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- Economic Council, Georgia
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- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Minerals Council of Australia
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- Bharathi Cement Corporation - India
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Ministry of Mines - Canada
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
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- Posco Energy - South Korea
- Wilmar Investment Holdings
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- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Australian Coal Association
- The University of Queensland
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
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- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- PTC India Limited - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
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