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Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
 The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening demand for coal in the world market. This has been worsened by the more recent tumbling price of oil as the world’s main source of energy, which has discouraged the conversion of energy use from oil to coal.
The diminishing growth of the coal-mining sector has contributed to a decline in government revenue over the last two years. Since coal has become Indonesia’s major export commodity, the weakening of coal exports has resulted in a declining trade performance of Indonesia’s non-oil and gas sector, and in turn, contributed to an overall trade deficit in the past three years.
However, the diminishing shine of the coal industry has its bright side. This is because the increasing amount of coal-mining activity in the past decade has not only resulted in serious environmental degradation, but also enhanced the proliferation of corrupt and clientelistic practices in the regions.
The previous rapid growth in coal demand not only benefited large coal-mining firms, but also increased the escalation and dispersion of small-scale coal mining activities, particularly after the decentralization of the coal sector in 2009. Law No.4/2009 on mineral and coal mining grants the province and district governments new authorities for issuing coal mining licenses for Indonesian companies, cooperatives or individuals, which covers an area of less than 50,000 hectares.
Since then, the magnitude of small-scale coal mining activities has increased tremendously. The Energy and Mineral Resources Ministry records that 9,662 permits were issued for small-scale coal mining by regencies as of 2011. Of these permits, only 3,778 were supported with the necessary documents without any outstanding legal issues.
Local governments have benefited from these mining operations through accepting large royalty payments from miners. In some coal-rich regencies, the revenues generated from coal royalties can be worth several times more than the contributions made by land and building taxes. The high profitability of small-scale coal mining has encouraged many regencies to allow these mining operations to operate without considering their detrimental impacts on the environment and the surrounding communities.
Many of these small open-pit coal mines are near residential areas, polluting rice fields and fish ponds and triggering landslides and floods.
Besides being an important source of local government revenue, coal has also become a source of funds for certain political groups close to local governments. Those who can obtain small-scale mining licenses in the regions are usually those who have some special or familial relationship with local government leaders, or are in some way connected to certain powerful local councilors.
Due to the high-cost politics associated with the direct elections of local government leaders since 2005, the money generated from small-scale coal mining activities has become an important source of political funding for government and political leaders participating in elections. An incumbent from a ruling political party can generate funds for a political campaign by developing a coal-mining business or issuing coal-mining licenses.
Apart from its high profitability, local politicians’ attraction to coal mining businesses is also due to the quick returns on investment compared to other booming commodities, such as palm oil. The quick returns generated by coal mining is very important for local politicians, who need to mobilize assets in anticipation of the local elections conducted every five years.
This high-cost politics and the local government’s lack of accountability have also provided a favorable environment for business actors and brokers to take advantage of the situation. Businessmen in the coal industry have often provided financial backing for the candidates for local government and legislative leaders who they think have a high chance of winning in the local elections, known as pilkada.
In exchange for financial backing, businessmen expect to gain rewards in the form of projects or certain policies in favor of their coal-mining business from the candidates they support, should they win the election.
Although the 2009 mining regulation has given greater opportunity for locals to obtain a mining permit, many have been reluctant to apply for a permit due to complications and bureaucratic red-tape in the processing of mining licenses. As a result, many locals choose to engage in illegal mining activities, frequently also supported by business actors, who serve as the financial backers and collectors of the coal extracted by local people.
These illegal activities have resulted in the extraction of millions of tons of coal per annum during its peak period.
Considering the serious problems resulting from the escalation and dispersion of coal-mining operations in the regions, the industry’s current downturn is a blessing in disguise. Weakening of coal demand has forced many coal-mining firms, particularly the illegal ones and the small- and medium-sized ones, to cease their operations.
This substantial reduction of coal-mining has reduced the frantic pace of exploitation and slowed environmental degradation in the last few years, which usually involves corrupt and clientelistic cooperation between businesses, government and political actors.
Nevertheless, if the government shows little concern for accountability and does not strengthen monitoring mechanisms overseeing the implementation of coal-sector decentralization, corrupt and clientelistic practices that have triggered rapid and careless coal exploitation will likely re-flourish once the demand for the commodity recovers. And undoubtedly, this condition is not only applicable to coal mining, but also to any other lucrative industry in Indonesia.
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The writer is the research director at the Center of Reform on Economics (CORE) Indonesia, Jakarta
Source: The Jakarta Post
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Friday, 20 February 15
U.S. PRODUCED AROUND 19.2 MILLION SHORT TONS OF COAL WEEK ON WEEK
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.2 million short tons (mmst) of coal ...
Thursday, 19 February 15
PANAMAX: NOPAC AND AUSSIE ROUNDS ARE DONE IN LOW/MID $ 4000; TRIPS VIA INDONESIA TO INDIA CLOSER TO THE $5000 MARK - FEARNLEYS
Handy
The handy and supra market has not seen any firming rates in front of the Chinese New Year and still suffering on low activity in both hemi ...
Wednesday, 18 February 15
DRY BULK SHIPPING TO RECOVER IN LATE 2015 - DREWRY MARITIME RESEARCH
Strong trade growth, moderating fleet development and deployment of new fuel efficient vessels are expected to lead to a recovery in dry bulk shipp ...
Tuesday, 17 February 15
WHO PAYS THE SUEZ CANAL FEES? - INCE & CO
KNOWLEDGE TO ELEVATE
This was an appeal from an arbitration award on a point of construction in relation to the wording of an addendum to a ch ...
Tuesday, 17 February 15
BUOYANT WAVES IN RECENT YEARS: GLOBAL SHIP INVESTMENT SINCE THE CRASH - HELLENIC SHIPPING NEWS
Anxiety about fleet expansion is a recurring feature of world shipping markets. Within the global maritime community, worries about the vast amount ...
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- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Kobexindo Tractors - Indoneisa
- CIMB Investment Bank - Malaysia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Bulk Trading Sa - Switzerland
- Antam Resourcindo - Indonesia
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
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