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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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Sunday, 13 January 13
THE FREIGHT MARKET: FAIRLY STEADY - VISTAAR
COALspot.com - The freight market was fairly steady with all the indices up with maximum gain in the Panamax segment. The BDI was up by 7.65 pct clo ...
Saturday, 12 January 13
SUB-BIT FOB INDONESIA COAL SWAPS: WEAK
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery has lost 0.32 percent WoW but CFR South China coal ship ...
Saturday, 12 January 13
HIGHER COAL PRICES: SEASONAL EFFECT
COALspot.com : Bahana Securities, one of the leading securities in Indonesia, said in its latest coal outlook that, on US and China&rsquo ...
Friday, 11 January 13
HBA HAS JUMPED BY US$ 5.80 PMT IN JANUARY 2013
COALspot.com - The Indonesian government has declared bench mark price for coal higher than December price. The monthly coal reference price f ...
Thursday, 10 January 13
PANAMAX : SOME GLIMMERS OF HOPE MID WEEK - FEARNLEYS
According to Fearnley’s weekly report, the Atlantic handy market is stable with rates around USD 11k for Cont-Feast and USD 17k bss USG/Feast. ...
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- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
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- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
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- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
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- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
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- Coal and Oil Company - UAE
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- CNBM International Corporation - China
- Energy Development Corp, Philippines
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- Orica Mining Services - Indonesia
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- White Energy Company Limited
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- Malabar Cements Ltd - India
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- The State Trading Corporation of India Ltd
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- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
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- Mintek Dendrill Indonesia
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- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
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- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
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- Jorong Barutama Greston.PT - Indonesia
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- Romanian Commodities Exchange
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Planning Commission, India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
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