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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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Thursday, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
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- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
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