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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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Saturday, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
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