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Friday, 19 June 15
INDONESIA'S COAL-TRAFFICKING PROBLEM REQUIRES IMPARTIAL INQUIRY - JAKARTA GLOBE
 Indonesia, the leading supplier to the seaborne thermal coal market, produces 420 million tons of coal per year, according to its official tally.
But the unofficial tally is much higher.
It’s an open secret, in fact, that millions of tons of Indonesian coal are being mined and shipped out of the country illegally. Last year at the Coaltrans Asia conference in Bali, R. Sukhyar, the minerals and coal director at Indonesia’s Energy and Mineral Resources Ministry, estimated such shipments totaled 50 million tons to 60 million tons annually. Other estimates put annual illegal shipments as high as 90 million tons, worth some $5 billion.
Whatever the exact amount, the government of Indonesia is losing hundreds of millions in royalty revenues each year on these illegal exports. Coal royalties are important to the fiscal health of the country — they account for $4 billion of the Indonesian national budget of $170 billion this year — and government services suffer when royalty programs aren’t rigorously enforced.
Indonesia, of course, is an important global supplier of coal. More than 80 percent of its annual production is exported, mostly to India, Japan, South Korea and India, and its coal exports — both legal and illegal — affect global markets. Illegal exports create a special, pernicious effect on the coal industry as a whole by undermining efforts to manage supply and rebalance prices.
Coal markets today are shrinking rapidly. The price of coal in the Asian seaborne market has dropped by about 50 percent since 2011. The industry is oversupplied and likely to remain so for the foreseeable future. Illegal exports only exacerbate that challenge.
Epidemic of illegal shipping
The country’s process of licensing, customs and royalty collection maintains the official tally of annual coal production. But neither ports nor coal-transfer system are as tightly controlled as they should be. Opportunity abounds for producers to escape regulation. Much of the avoidance happens in Indonesia’s network of small private and unmonitored ports, and much of it occurs at offshore transfer points that are difficult to monitor.
The problem stems from the roaring days of global coal market expansion during the mid-2000s, when Indonesia saw a huge number of new companies, new permits and news investment in coal production.
Indonesian coal production skyrocketed to 420 million tons in 2013 from 174 million tons in 2006 in a difficult-to-manage boom that helped evasive companies get away with either ignoring reporting requirements altogether or simply under-reporting their coal production.
The government is raising coal-royalty rates in a move that will only magnify the competitive advantage royalty-avoiding producers hold over reputable companies that follow production- and export-reporting requirements. Thankfully, Indonesia’s illegal coal-export activity is under growing scrutiny today, although recent central government efforts at various reforms have done little so far to actually reduce illegal shipments.
Indonesian leaders seem well aware that unreported or under-reported exports undermine broader policy objectives of improving national energy security, providing sound management of Indonesia’s finite natural resources, having effective border control and showing leadership in international trade management.
Yet it’s unlikely the government will succeed on its own. Illegal coal mining and shipping is embedded in the economic fabric of Indonesia. Financially powerful interests support the status quo. Unreported or underreported activity has become a crucial source of revenue for regional political interests, and even the Indonesian Coal Mining Association (APBI) says it finds little to support in reform proposals. The drive to police illegal production and trafficking is also stymied by deeply endemic government corruption.
No level playing field
Indonesia and its people are currently being shortchanged by the absence of a business climate committed to a level playing field across its coal industry. Reform is in the national interest — and it makes good business sense, too, because it would tighten up the seaborne coal markets and provide some price stability for Indonesia’s largest source of export revenue.
When corruption is as pervasive as it is today in Indonesia’s coal industry, it is difficult to maintain a national effort to reform it. This is not an uncommon challenge, and is often best addressed by outside parties invited by the authorities to observe, report and enforce change. Reputable business, governmental and judicial officials are often brought in to help companies or countries find the right long-term path toward restoring confidence where confidence has been lost.
Many mechanisms exist to empower an independent organization with the authority to act. An external investigation of illegal coal shipping in Indonesia could go a long way to establishing a strong basis for establishing honest reform.
By Tom Sanzillo
About Tom Sanzillo
Tom Sanzillo is the director of finance at the Institute for Energy Economics and Financial Analysis (IEEFA), which promotes research into global energy markets. Sanzillo has 30 years of experience in public and private finance, including as a first deputy comptroller of New York State, where he held oversight over a $156 billion pension fund and $200 billion in municipal bond programs.
Source: The Jakarta Globe
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Friday, 07 August 15
COAL PRICE DEVELOPMENTS CAN ONLY BE DESCRIBED, SUCCINCTLY AS "OVERSUPPLY MEETS SUBDUED DEMAND" - VDKI
Coal Outlook 2015 – International
Regarding the outlook for global coal trading, two questions arise: firstly, “ whether the years of ...
Friday, 07 August 15
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 528.1 MMST; DOWN 8.7% Y/Y - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.7 million shor ...
Thursday, 06 August 15
THE RATES FOR CAPES SHOOT UP LAST WEEK; GIVING THIS RECENT RALLY SOME MUCH NEEDED LEGS - INTERMODAL
COALspot.com: The Dry Bulk market noted another positive closing last week, entirely supported by Capesize performance, which managed to balance th ...
Thursday, 06 August 15
HARD COAL AND COKE IMPORTS TO GERMANY REACH NEW ALL-TIME HIGH OF 56.2M TONES IN 2014
Demand for German and imported hard coal In 2014, in 2014 fell by almost 8%, or 4.8m TCE, to 56.2m TCE.
According to German Coal Importer ...
Thursday, 06 August 15
SEABORNE WORLD TRADE IN STEAM COAL GROWS BY 3% YOY - GERMAN COAL IMPORTER ASSOCIATION
Global trade with hard coal, at 1,272m tones in 2014, increased by 35m tonnes or 3% in comparison with the previous year.
According to associa ...
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- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Latin American Coal - Colombia
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Georgia Ports Authority, United States
- Planning Commission, India
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
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