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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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Wednesday, 30 June 10
PTBA TO SUPPLY ADDITIONAL 180 MLN TONS OF COAL TO PLN FOR 20 YEARS
COALspot.com: Indonesia's state-owned coal mining company PT Tambang Batubara Bukit Asam Tbk (PTBA) has entered into a new contract with state owne ...
Wednesday, 30 June 10
U.S. STEAM COAL EXPORTS TO SUPPORT FREIGHT RATES
Booming North American coal exports to China, driven by the country's insatiable need for steel raw materials, will provide support to freight rate ...
Tuesday, 29 June 10
EXPORT LETTER OF CREDIT PLAN DUMPED - THE JAKARTA GLOBE
The Jakartaglobe reported that, Indonesia has canceled a proposed regulation that would have required exporters of commodities such as cocoa, coffee ...
Tuesday, 29 June 10
BUMA TO MOVE AROUND 333 MLN BCM OF OVERBURDEN IN 2010
COALspot.com: PT Delta Dunia Makmur Tbk, holding company of Indonesia's second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA), ...
Tuesday, 29 June 10
DRY BULK'S DOWNFALL FINALLY SHOWING SIGNS OF STABILIZATION
Although the dry bulk market has begun the week where it left off, that is on a downward note, brokers and charterers appear to be on the consensus ...
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- Eastern Energy - Thailand
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- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
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- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Planning Commission, India
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- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
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- Eastern Coal Council - USA
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- Pendopo Energi Batubara - Indonesia
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- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
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- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
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- Energy Development Corp, Philippines
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Romanian Commodities Exchange
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- MS Steel International - UAE
- Wilmar Investment Holdings
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- Carbofer General Trading SA - India
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- The University of Queensland
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- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- VISA Power Limited - India
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