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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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- Australian Coal Association
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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