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Sunday, 20 June 10
OUR COAL: ITS DEVELOPMENT AND CONTROVERSIAL ISSUES
 Indonesia’s production of coal has been growing amazingly. In the mid 1980s, national coal production was less than 1 million tons per annum, whereas energy planners (in the fourth Five Year Development Plan: 1989-1994) pointed at 10 million tons as the national production target.
The current production has jumped dramatically, recorded as 237 million tons in 2008 (predicted to achieve 270 million tons this year), making Indonesia a world class producer and the largest exporter of coal around the globe. The skyrocketing growth of our coal production has also incited many controversial issues.
Coal is considered as the dirtiest among fossil fuels, making environmentalists oppose their wide use
as fuel.
However, the proposal for ceasing use of coal — power generation, for instance — would be challenged by power utilities demanding low cost fuel that coal may offer and by the government, which has the responsibility to provide electricity as well as have revenue from exploiting its energy resources.
Despite the world’s rising anxiety of global warming, IEA (International Energy Agency: World Energy Outlook 2009) statistics shows that the world consumption for coal, for the last decade, is still growing the fastest among primary energy sources.
The environmental problem associated with coal in Indonesia is not limited to green houses gases (GHG), but also damage and pollution since its exploitation, transportation and uses to post mining.
It is easy to find where many coal fields are not mined appropriately according to “good mining and environmental practices”, coal transportation is not considering safety standards and is damaging rivers, (public) roads and seashores.
The coal mining has polluted the land, water and air of especially Kalimantan, where more than 90 percent of Indonesia’s coal mining operations take place.
It is sad that many of the previous mining areas have been abandoned without being properly reclaimed, whereas thousands of hectares of the island’s tropical forests have been converted into desert.
The soaring exploitation, including its negative impact on the environment, has a strong correlation with the number of licensing/permits awarded.
The introduction of the 1999 Regional Autonomy Law, subsequently followed by the 1999 Fiscal Balancing Law between the Central and Regional Governments have — to some degree — impacted on the coal licensing regime, where larger authorities had been given to regional/local governments.
Under the new licensing regime by local governments, requirements for coal permits tend to be relaxed whereas monitoring has not been done properly.
As a result, the number of permits (Mining Authorization/KP) has been growing considerably (currently 462, of which 169 are producing), coal production increases, but also environmental problems and the issues of illegal mining exist.
The question of who really owns the KP licenses exists, which was defined as that it can be owned by Indonesian national/companies only.
While the largest part of coal in Indonesia are being produced by large companies (the holders of Coal Contract of Work/PKP2B), some coal is mined by small scale and illegal miners.
It is believed that a significant amount of coal has been produced by illegal miners (some 5 million tons annually) and part has gone to meet export demand.
Wherever in the world, illegal miners lack interest in responsible mining and mine rehabilitation practices. Illegal mining is a problem for potential investors, the environment and government revenues.
The government has introduced measures to crack down on problems, including arresting illegal miners.
However, it cannot be the only solution since illegal mining is actually rooted in underemployment, local poverty and weak law enforcement, while the number of people involved in these activities is quite significant.
An alternative to confrontation to illegal miners by the central government (who awards the large scale PKP2B mining license) should be a cooperative and more comprehensive approach.
“Despite the world’s anxiety of global warming, IEA statistics shows that the world consumption for coal is still growing the fastest among primary energy sources.”
Work together with local/rural governments and communities to reduce poverty, educate/assist the illegal miners to increase their awareness on good mining practices (including mine rehabilitation), provide transition period fiscal incentives to encourage illegal mining toward the regulated mining sector, among others.
It needs to maintain an appropriate balance between the soaring exports of coal (about three quarters of production on average) and the domestic growing demand for the same fuel.
Push for exports is still coming largely from the traditional East Asians (Japan is the largest), while the coal-hungry India and China are also increasing their demand for our coal.
The exports will be competed with by the Blue Print for Energy Management 2005-2025 pointing out that one third of Indonesia’s energy primary energy mix in 2025 is to be supplied by coal, (the current share is about 15 percent).
Even though it is often mentioned that our coal reserves are quite large (current proven reserves of 5.5 billion tons; estimated resources of 105 tones) and that our reserves for coal are much larger than that of oil and gas, we should watch their fast rate of exploitation cautiously.
It needs to recalculate the benefit of exploiting them, taking into account their damage to the environment and what is left post mining. Where have all the revenues from exploiting that coal gone? Is the escalating export not jeopardizing the domestic energy security in the near future?
We have ample experiences, for instance in exploiting the resources-rich Kalimantan. The forests, oil and gas reserves have been exploited for about four to five decades, but it seems that the island has not enjoyed the fruits of the excessive exploitation: the current regional economy remains weak, infrastructure is poor and energy supplies for local uses have not been secured.
It needs to promote the terms “resources balance, depletion, sustainability”, start internalizing the costs of environmental impact and enforce those concepts into workable policies for our coal mining development.
The writer is the senior energy planner and an economist with the National Development Planning Agency. The opinions expressed are his own.
Source: The Jakarta Post ( Hanan Nugroho)
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Friday, 02 July 10
PROPOSED MINERAL RESOURCE RENT TAX - PRESS RELEASE (2)
Press Release: BHP Billiton, Rio Tinto and Xstrata said today that they are encouraged by the Federal Government’s announcement that it propos ...
Friday, 02 July 10
MINERALS RESOURCE TAXATION IN AUSTRALIA - PRESS RELEASE
Press Release : Rio Tinto acknowledges the Australian Government’s announcement that the Resource Super Profits Tax (RSPT) proposal will be re ...
Thursday, 01 July 10
TATA POWER TO RAISE US$300 MILLION THROUGH ITS COAL SPVS TO FUND ADDITIONAL ACQUISITIONS AND / OR REDUCE OUTSTANDING DEBT
Stock Markets Review reported that, Tata Power, India’s largest private power player has signed an agreement to raise US$300 million in Bhira ...
Thursday, 01 July 10
HELLENIC SHIPPING NEWS POLL: THE BDI WILL STAY ABOVE 3,000 POINTS IN THE SECOND HALF OF 2010
When Hellenic Shipping News Worldwide prepared June’s poll asking readers about where do they think that the Baltic Dry Index (BDI) will range ...
Thursday, 01 July 10
PANAMAX MARKETS CONTINUE TO DROP IN ALL BASINS - FEARNLEYS
Handy
Atlantic rates continue to slide with little activity. Supras open in USG get low 30´s to Med and mid 40´s to FEast. Hmax/Supra ...
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- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Sakthi Sugars Limited - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- Power Finance Corporation Ltd., India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Videocon Industries ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Leighton Contractors Pty Ltd - Australia
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