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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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Friday, 09 March 12
SHIP OWNERS LOOKING TO CHINA FOR REVIVAL, WHILE THEY KEEP SELLING OLD SHIPS FOR SCRAP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With China’s economic policy plan for the future on every ship owner’s mind, at least those involved in the dry bulk industry, the lates ...
Thursday, 08 March 12
INDONESIA'S COAL SECTOR CAN BENEFIT FROM CLEARER REGULATIONS - FITCH RATINGS
Fitch Ratings says Indonesia's coal mining sector should continue to see strong growth prospects but can benefit from clearer and more predictable ...
Thursday, 08 March 12
DRY BULK MARKET ON THE RISE; CHINAS COAL IMPORTS COULD INCREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept on rising back to healthier levels yesterday, with the BDI (Baltic Dry Index) the industry’s benchmark, marking its 8 ...
Wednesday, 07 March 12
INDONESIA COAL BENCHMARK PRICE GAINS FOR SECOND MONTH
COALspot.com - Indonesia raised the monthly coal reference price for sales in March by 1.15 percent, the second increase since February.
The Mini ...
Wednesday, 07 March 12
INDONESIA TO LIMIT FOREIGN OWNERSHIP IN MINES TO 49 PERCENT WITHIN 10 YEARS OF PRODUCTION
COALspot.com - Foreign holders of mining licenses in Indonesia have to divert 51% of their stakes to Indonesian government or domestic entitie ...
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- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- The University of Queensland
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Interocean Group of Companies - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- PTC India Limited - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
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