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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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Monday, 07 April 14
WEEKLY SUB-BIT FOB INDONESIA COAL SWAP CLAIMS EDGE FALL; TREND NEGATIVE
COALspot.com: Indonesian coal swaps for average Q4’ 2014 lost on month, day and on week according to AsiaClear OTC coal swap's reports ...
Monday, 07 April 14
API 8 CFR SOUTH CHINA COAL SWAPS GAINED 2.09% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries gained 2.09 percent month on month and closed at US$ 75.68 per ...
Sunday, 06 April 14
THE FREIGHT MARKET KEEPS SLIDING
COALspot.com: The freight market continued to drop this week. The BDI (Baltic Dry Index) is a widely followed metric that reflects the overall r ...
Friday, 04 April 14
UNITED STATES COAL OUTPUT UP 5.4% IN PAST WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 19.9 million short tons (mmst) of coal i ...
Thursday, 03 April 14
PANAMAX SECTOR IS WATCHING A SEVERE DROP IN RATES - FEARNLEYS
Handy
A further weaker sentiment for the Supras as well in both hemispheres this week with oversupply of tonnage being the major headline. Tra ...
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- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
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- Ministry of Transport, Egypt
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- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
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- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
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- White Energy Company Limited
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- Samtan Co., Ltd - South Korea
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- Indian Oil Corporation Limited
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- Economic Council, Georgia
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- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
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- Petron Corporation, Philippines
- Eastern Coal Council - USA
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- GN Power Mariveles Coal Plant, Philippines
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- Africa Commodities Group - South Africa
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- Romanian Commodities Exchange
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- Sakthi Sugars Limited - India
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- Bhoruka Overseas - Indonesia
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- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
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- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Global Coal Blending Company Limited - Australia
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- Larsen & Toubro Limited - India
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- Orica Mining Services - Indonesia
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- Eastern Energy - Thailand
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- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
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- Cigading International Bulk Terminal - Indonesia
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- Kohat Cement Company Ltd. - Pakistan
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- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
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- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
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- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
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- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
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- Marubeni Corporation - India
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PTC India Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
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- GVK Power & Infra Limited - India
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