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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, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
Monday, 20 January 14
SUB-BIT INDONESIA COAL SWAP SEEN LOWER IN 2ND HALF OF 2014
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.78 pmt month on month on Friday 17 January 2014. T ...
Monday, 20 January 14
THE CFR SOUTH CHINA COAL MARKET APPEARS TO HAVE LOST DIRECTION
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 4.25 percept month on month and closed at US$ 79.48 per mt as ...
Sunday, 19 January 14
FREIGHT MARKETS SEE CONTINUED WEAK PERFORMANCE
COALspot.com: The market has continued to soften particularly in the far East/SE Asia sector.
The BDI was down 6 pct week on week, the index was ...
Friday, 17 January 14
US COAL PRODUCTION DOWN WEEK ON WEEK: EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.3 million short tons (mmst) of co ...
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- Kartika Selabumi Mining - Indonesia
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- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
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- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- LBH Netherlands Bv - Netherlands
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- Chamber of Mines of South Africa
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- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
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- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- White Energy Company Limited
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- The Treasury - Australian Government
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- Indian Oil Corporation Limited
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- Merrill Lynch Commodities Europe
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- Alfred C Toepfer International GmbH - Germany
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- Directorate General of MIneral and Coal - Indonesia
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- Sindya Power Generating Company Private Ltd
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- Petron Corporation, Philippines
- Samtan Co., Ltd - South Korea
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- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
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- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
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- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
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- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
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- Interocean Group of Companies - India
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- SMC Global Power, Philippines
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- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
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- Planning Commission, India
- Ministry of Transport, Egypt
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- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
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- Economic Council, Georgia
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- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
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- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Wilmar Investment Holdings
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- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- The University of Queensland
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
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