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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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Thursday, 03 June 10
GOVT CONSIDERING IMPORT PARITY PRICE FOR DOMESTIC COAL
The government on June 1 said it is considering to price domestic coal on par with global rates, a move which may increase the cost of the raw mater ...
Wednesday, 02 June 10
SRI LANKA TESTS 1ST COAL POWER PLANT IN SEPT.
Sri Lanka will start testing its first 300 MegaWatt coal power plant in September with plans to connect it to the national distribution grid by Janu ...
Wednesday, 02 June 10
CHINA'S IRON ORE IMPORTS TO KEEP BEING THE BIGGEST FACTOR FOR DRY BULK FREIGHT RATES SAY READERS
With dry bulk freight rates staging a positive rally during most of May, the industry’s main benchmark, the Baltic Dry Index (BDI) has managed ...
Wednesday, 02 June 10
KIDECO TO PRODUCE 29.5 MILLION TONS OF COAL IN 2010
COALspot.com: Kideco to produce 29.5 million tons of coal in 2010 up 4.8 million or about 19 percent up from 2009 production. Kideco produced 24.7 m ...
Wednesday, 02 June 10
PLN TO DEVOUR 133 PERCENT MORE COAL IN NEXT FIVE YEARS
The Jakarta globe reported that, State electricity company PT Perusahaan Listrik Negara will more than double the amount of coal it uses over the ne ...
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- Ceylon Electricity Board - Sri Lanka
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
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- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Parliament of New Zealand
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- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
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- Merrill Lynch Commodities Europe
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- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Uttam Galva Steels Limited - India
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- Siam City Cement PLC, Thailand
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
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- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
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- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Bank of Tokyo Mitsubishi UFJ Ltd
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- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- The University of Queensland
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
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