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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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- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
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- Maharashtra Electricity Regulatory Commission - India
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- Global Business Power Corporation, Philippines
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- Dalmia Cement Bharat India
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- Billiton Holdings Pty Ltd - Australia
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- White Energy Company Limited
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- Indonesian Coal Mining Association
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- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- ICICI Bank Limited - India
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- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
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- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
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- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Minerals Council of Australia
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Bangladesh Power Developement Board
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
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