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Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
 The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening demand for coal in the world market. This has been worsened by the more recent tumbling price of oil as the world’s main source of energy, which has discouraged the conversion of energy use from oil to coal.
The diminishing growth of the coal-mining sector has contributed to a decline in government revenue over the last two years. Since coal has become Indonesia’s major export commodity, the weakening of coal exports has resulted in a declining trade performance of Indonesia’s non-oil and gas sector, and in turn, contributed to an overall trade deficit in the past three years.
However, the diminishing shine of the coal industry has its bright side. This is because the increasing amount of coal-mining activity in the past decade has not only resulted in serious environmental degradation, but also enhanced the proliferation of corrupt and clientelistic practices in the regions.
The previous rapid growth in coal demand not only benefited large coal-mining firms, but also increased the escalation and dispersion of small-scale coal mining activities, particularly after the decentralization of the coal sector in 2009. Law No.4/2009 on mineral and coal mining grants the province and district governments new authorities for issuing coal mining licenses for Indonesian companies, cooperatives or individuals, which covers an area of less than 50,000 hectares.
Since then, the magnitude of small-scale coal mining activities has increased tremendously. The Energy and Mineral Resources Ministry records that 9,662 permits were issued for small-scale coal mining by regencies as of 2011. Of these permits, only 3,778 were supported with the necessary documents without any outstanding legal issues.
Local governments have benefited from these mining operations through accepting large royalty payments from miners. In some coal-rich regencies, the revenues generated from coal royalties can be worth several times more than the contributions made by land and building taxes. The high profitability of small-scale coal mining has encouraged many regencies to allow these mining operations to operate without considering their detrimental impacts on the environment and the surrounding communities.
Many of these small open-pit coal mines are near residential areas, polluting rice fields and fish ponds and triggering landslides and floods.
Besides being an important source of local government revenue, coal has also become a source of funds for certain political groups close to local governments. Those who can obtain small-scale mining licenses in the regions are usually those who have some special or familial relationship with local government leaders, or are in some way connected to certain powerful local councilors.
Due to the high-cost politics associated with the direct elections of local government leaders since 2005, the money generated from small-scale coal mining activities has become an important source of political funding for government and political leaders participating in elections. An incumbent from a ruling political party can generate funds for a political campaign by developing a coal-mining business or issuing coal-mining licenses.
Apart from its high profitability, local politicians’ attraction to coal mining businesses is also due to the quick returns on investment compared to other booming commodities, such as palm oil. The quick returns generated by coal mining is very important for local politicians, who need to mobilize assets in anticipation of the local elections conducted every five years.
This high-cost politics and the local government’s lack of accountability have also provided a favorable environment for business actors and brokers to take advantage of the situation. Businessmen in the coal industry have often provided financial backing for the candidates for local government and legislative leaders who they think have a high chance of winning in the local elections, known as pilkada.
In exchange for financial backing, businessmen expect to gain rewards in the form of projects or certain policies in favor of their coal-mining business from the candidates they support, should they win the election.
Although the 2009 mining regulation has given greater opportunity for locals to obtain a mining permit, many have been reluctant to apply for a permit due to complications and bureaucratic red-tape in the processing of mining licenses. As a result, many locals choose to engage in illegal mining activities, frequently also supported by business actors, who serve as the financial backers and collectors of the coal extracted by local people.
These illegal activities have resulted in the extraction of millions of tons of coal per annum during its peak period.
Considering the serious problems resulting from the escalation and dispersion of coal-mining operations in the regions, the industry’s current downturn is a blessing in disguise. Weakening of coal demand has forced many coal-mining firms, particularly the illegal ones and the small- and medium-sized ones, to cease their operations.
This substantial reduction of coal-mining has reduced the frantic pace of exploitation and slowed environmental degradation in the last few years, which usually involves corrupt and clientelistic cooperation between businesses, government and political actors.
Nevertheless, if the government shows little concern for accountability and does not strengthen monitoring mechanisms overseeing the implementation of coal-sector decentralization, corrupt and clientelistic practices that have triggered rapid and careless coal exploitation will likely re-flourish once the demand for the commodity recovers. And undoubtedly, this condition is not only applicable to coal mining, but also to any other lucrative industry in Indonesia.
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The writer is the research director at the Center of Reform on Economics (CORE) Indonesia, Jakarta
Source: The Jakarta Post
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Thursday, 26 February 15
DRY BULK MARKET LOOKING FOR POSITIVE MOMENTUM, BUT PROSPECTS REMAIN DIM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the Baltic Dry Index (BDI) inched a bit higher over the past couple of sessions and the Chinese are returning to the market after a week long hi ...
Wednesday, 25 February 15
PORT OF NEWCASTLE SHIPPED 13.16MT OF COAL IN JANUARY; DECLINED 16.70% FROM A MONTH AGO
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.15 billio ...
Wednesday, 25 February 15
BDI SLIPPING ONCE MORE TO FRESH HISTORICAL LOWS
COALspot.com: With the BDI slipping once more to fresh historical lows and the Chinese holidays underway, signs for a positive reversal in the Dry ...
Tuesday, 24 February 15
FOB INDONESIA COAL SWAP SET TO RALLY
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap increased US$ 3.30 (+7.30%) ...
Tuesday, 24 February 15
Q3' FOB RICHARDS BAY COAL SWAP CLOSED $59.80 W/E 20 FEB
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and decline week on week.
The Q2 swap has soar ...
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- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- The University of Queensland
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Billiton Holdings Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Economic Council, Georgia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
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