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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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Monday, 07 June 10
SOUTH AFRICA COAL STAYS NEAR 18-MONTH HIGH ON EUROPEAN DEMAND - BLOOMBERG
Bloomberg Reported that, Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, ...
Sunday, 06 June 10
THE DOWNWARD TREND FOR S6 AND S7 ROUTE IS LIKELY TO CONTINUE NEXT WEEK - VISTAAR
COALspot.com: "This seemed market heading for corrections with all sectors down", said, Capt. Reddy, MD of Vistaar Shipping Singapore, an ...
Sunday, 06 June 10
STEAM COAL MAY BECOME NEXT BOOMING COMMODITY IN AUSTRALIA - DB
Deutsche Bank predicts that thermal coal could become Australia's next booming commodity. The German investment bank's global thermal coal team ex ...
Friday, 04 June 10
INDO/INDIA AROUND THE MID 20'S LEVEL AND MID TO HIGH 20'S INDIA/CHINA
Handy
After a quiet end to last week, the Atlantic handysize market continued&nb ...
Thursday, 03 June 10
INDO GOVERNMENT TRIES TO CALM BUSINESSES FEARS OVER FOREST - CLEARING MORATORIUM
The Jakarta Globe reported that, as producers of coal and palm oil continued to howl, the government on Tuesday offered reassurances that the develo ...
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- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
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- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- The University of Queensland
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- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Planning Commission, India
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- Ministry of Finance - Indonesia
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- Maheswari Brothers Coal Limited - India
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- European Bulk Services B.V. - Netherlands
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- Bhatia International Limited - India
- Anglo American - United Kingdom
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- OPG Power Generation Pvt Ltd - India
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- Electricity Authority, New Zealand
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- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
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- Siam City Cement - Thailand
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- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
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- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bangladesh Power Developement Board
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- Romanian Commodities Exchange
- Posco Energy - South Korea
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
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- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
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- Eastern Energy - Thailand
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
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- Latin American Coal - Colombia
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
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- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
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- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
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- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
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- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Economic Council, Georgia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
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- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
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- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Australian Coal Association
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
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