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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, 17 February 14
Q1 2015 COAL SWAPS CLOSED $ 2.21 HIGHER THAN Q2 2014 SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 3.16 percent month on month and closed at US$ 76.12 per mt as o ...
Sunday, 16 February 14
SUPRAMAX : THE FAR EAST/SE ASIA CHARTER RATES FIRMED UP
COALspot.com: The freight market had a mixed reaction this week with BDI increased by 1.37 pct and closing at 1106 points on Valentine day. The cape ...
Friday, 14 February 14
US COAL PRODUCTION STILL SLIPPING
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.9 million short tons (mmst) of coal in ...
Thursday, 13 February 14
PANAMAX : NOT ENOUGH REQUIREMENTS TO KEEP THE ATLANTIC MARKET FLOATING - FEARNLEYS AS
Handy
After the Chinese holidays the week started on a positive note. Owners are talking higher rates but chrtrs are still somehow reluctant to mov ...
Thursday, 13 February 14
DRY BULK MARKET FACES BETTER PROSPECTS ON THE BACK OF IMPROVING DEMAND AND SUPPLY BALANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has started off the New Year on the "left foot", with the strong finish of 2013 proving to be unsustainable, on the ba ...
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- Pipit Mutiara Jaya. PT, Indonesia
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- Georgia Ports Authority, United States
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- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
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- Manunggal Multi Energi - Indonesia
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- Global Coal Blending Company Limited - Australia
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- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
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- Essar Steel Hazira Ltd - India
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
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- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
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- Samtan Co., Ltd - South Korea
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- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Karbindo Abesyapradhi - Indoneisa
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- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
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- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- ASAPP Information Group - India
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- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Indogreen Group - Indonesia
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- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- Indika Energy - Indonesia
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- The University of Queensland
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
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- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
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