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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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Tuesday, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
Sunday, 15 February 15
BALTIC DRY INDEX CONTINUALLY DIPPED IN RED
COALspot.com: The Baltic Dry Index continues its decline and fell 5.18 pct to 530 points week on week due to falling commodity prices and declining ...
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- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- Commonwealth Bank - Australia
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- Australian Coal Association
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
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