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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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Saturday, 14 February 15
SHALE GAS AND TIGHT OIL ARE COMMERCIALLY PRODUCED IN JUST FOUR COUNTRIES - EIA
KNOWLEDGE TO ELEVATE
The United States, Canada, China, and Argentina are currently the only four countries in the world that are producing com ...
Friday, 13 February 15
U.S. WEEKLY COAL PRODUCTION SHOWS 10% DECLINE
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.1 million short tons (mmst) of coal ...
Friday, 13 February 15
SMALL AND MEDIUM-SIZED SHIP OWNERS SQUEEZED OUT OF THE MARKET ON CRASHING DRY BULK MARKET AND EUROZONE CRISIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Financing issues have started to tighten the noose in the throats of small and medium-size ship owners, who were already facing problems over the p ...
Thursday, 12 February 15
CAPESIZE: THE BEST DESCRIPTION FOR THE MARKET IS, FLAT - FEARNRESEARCH
Handy
The handy and supra market is also being affected by the marginal volume of activity in the commodity sales. We see a small upturn in the T ...
Thursday, 12 February 15
DRY BULK OWNERS SCRAP MORE VESSELS, AS MARKET REACHES HISTORICAL LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has reached historical lows this week, with the Baltic Dry Index (BDI) now trading at levels below operating expense levels for ...
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- Global Coal Blending Company Limited - Australia
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Aditya Birla Group - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- The University of Queensland
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Planning Commission, India
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
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