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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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Thursday, 05 December 13
PANAMAX : THE FIRM TENDENCY CONTINUES - FEARNRESEARCH
Handy
It has been an active week for the Supramax and Handysize segment. USG is almost boiling and charterers looking to cover their December stems ...
Wednesday, 04 December 13
INDONESIAN COAL EXPORTS VOLUME AND REVENUE IN OCTOBER MARCHED TOWARDS NORTH
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $1.76* billion worth of ...
Wednesday, 04 December 13
WEST AUSTRALIA IRON ORE FIXTURES ALSO CONTINUING TO PROVIDE A STEADY FLOW OF BUSINESS FOR CAPES - INTERMODAL
The Dry Bulk market has reversed course this past week, bringing back some of the lost excitement of the past month, as all size segments climbed hi ...
Wednesday, 04 December 13
THE BUYERS' DEMAND IS CONTINUOUSLY BULLISH - KONSTANTINOS KONTOMICHIS
The very low rates that prevailed for the bigger part of 2013 seem to have prepared the ground for buying opportunities for shipping investors. The ...
Wednesday, 04 December 13
SGX AND CFA TO COLLABORATE TO DEVELOP DERIVATIVES MARKETS IN CHINA AND SINGAPORE
Singapore Exchange (SGX) and the China Futures Association (CFA) are cooperating in the development of derivatives markets in China and Singapore.
...
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- Karaikal Port Pvt Ltd - India
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- ICICI Bank Limited - India
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- Barasentosa Lestari - Indonesia
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- Malabar Cements Ltd - India
- Directorate Of Revenue Intelligence - India
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- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
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- Sarangani Energy Corporation, Philippines
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- Standard Chartered Bank - UAE
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
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- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- The University of Queensland
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Commodity Traders Exchange
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- Minerals Council of Australia
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- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
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- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Rashtriya Ispat Nigam Limited - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
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- Ministry of Finance - Indonesia
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- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
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- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
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- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
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- MS Steel International - UAE
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