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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, 15 March 12
RESOURCE ALAM FY11 PROFIT UP 171% - INSIDER STORIES
Insider Stories reported that, coal mining company PT Resource Alam Indonesia Tbk (KKGI) reported a 171.16% jump in net profit last year on the back ...
Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by ...
Wednesday, 14 March 12
COKAL TAKES ANOTHER STEP IN DEVELOPING INFRASTRUCTURE TO FACILITATE METALLURGICAL COAL PRODUCTION
Global coal group, Cokal Limited (ASX-CKA), has signed Memorandums of Understanding (MoU’s) to develop two river ports and two small scale coa ...
Tuesday, 13 March 12
CLARIFICATION OF GR 24 OF 2012 REQUIRING DIVESTMENT OF FOREIGN OWNERSHIP OVER TIME
ASX Announcement
Global metallurgical coal group, Cokal Limited (ASX-CKA), is responding to the recent announcement of the Indonesian Ministry of ...
Tuesday, 13 March 12
EUROPEAN COAL CONTANGO: FURTHER STEEPNESS REQUIRED TO MAKE LARGE SCALE PHYSICAL TIME SPREAD ARBITRAGE MORE ATTRACTIVE - MISWIN MAHESH, BARCLAYS CAPITAL
COALspot.com - "With the contango between the Y+1 and M+1 ARA delivered contract now averaging above the $14/t level, there is an increasing in ...
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- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- The University of Queensland
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Thiess Contractors Indonesia
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- Mintek Dendrill Indonesia
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- Coalindo Energy - Indonesia
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- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- IEA Clean Coal Centre - UK
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- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
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- Savvy Resources Ltd - HongKong
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
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- Energy Development Corp, Philippines
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- Chamber of Mines of South Africa
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- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
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- Australian Coal Association
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Anglo American - United Kingdom
- Wilmar Investment Holdings
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- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
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- Deloitte Consulting - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Planning Commission, India
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
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