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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, 26 May 10
ADANI GROUP EYES AFRICA FOR COAL MINING PROJECTS
India Info Line reported that, After acquiring coal mines for importing Indonesian coal to run its thermal power plants in the country, the Adani Gr ...
Wednesday, 26 May 10
DRY BULK MARKET SHOOTS UP, CLOSES IN ON POST-CRISIS ERA HIGHS
In an opposite trend than that of the previous week, the Baltic Dry Index (BDI), a benchmark for tracking costs to haul commodities at sea, shot up ...
Wednesday, 26 May 10
BUMI TO CUT UP TO USD 1 BILLION DEBT IN 12 MONTHS
Press Release : PT Bumi Resources Tbk. announced yesterday that it has revived its intent to issue non preemptive shares and added this to the agend ...
Tuesday, 25 May 10
COAL PRODUCTION MAY REACH 320 MILLION TONS THIS YEAR - THE JAKARTA POST
The Jakarta Post reported that, Indonesian coal miners expect to produce as much as 320 million tons of coal this year, an increase of nearly 7 perc ...
Tuesday, 25 May 10
KALIMANTAN COAL RAIL PROJECT RUNS INTO COST DELAY - THE JAKARTA GLOBE
The Jakart globe reported that, A$1.5 billion coal rail and port project planned for Central Kalimantan may be delayed by a year after a review of t ...
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- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
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- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
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- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
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- Australian Commodity Traders Exchange
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- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
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- Central Electricity Authority - India
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- Indika Energy - Indonesia
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- Power Finance Corporation Ltd., India
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- Rashtriya Ispat Nigam Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
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- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Merrill Lynch Commodities Europe
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- Directorate General of MIneral and Coal - Indonesia
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- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Australian Coal Association
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
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