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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, 23 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
In Australia, the world’s largest mining group, BHP Billiton, will beat the iron ore export target of more than 220 million tonnes for 2014. ...
Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered ab ...
Tuesday, 22 July 14
INDONESIAN ELECTION RESULT ENCOURAGING FOR FOREIGN INVESTMENT IN ENERGY AND MINING SECTORS - WOOD MACKENZIE
Joko Widodo-Jusuf Kalla has been announced as the official winner of Indonesia's presidential election. Joko Widodo, or Jokowi, is viewed as a ...
Tuesday, 22 July 14
THE CURRENT COAL PRICES ARE UNPROFITABLE FOR MINERS; COAL PRICES WILL GRADUALLY INCREASE - FITCH
COALspot.com: The Fitch Ratings expect the benchmark Newcastle coal prices (currently at about USD70/MT) to gradually increase.
Fitch's la ...
Tuesday, 22 July 14
SUB-BIT FOB INDONESIA COAL Q3' 14 DOWN 5.21%; Q4' 14 DOWN 3.56%; Q1' 15 DOWN 4.75% M-O-M
COALspot.com: Indonesian coal swaps for average Q3’ 2014 flat on day, weak week on week and on month according to AsiaClear OTC coal swap' ...
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- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- The University of Queensland
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Wood Mackenzie - Singapore
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