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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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Tuesday, 24 February 15
IHS ENERGY COAL CONFERENCE OF THE AMERICAS
Attend the IHS Energy Coal Conference of the Americas 17-19 March in Cartagena, Colombia and learn about timely concerns in today's coal indust ...
Monday, 23 February 15
Q2' CFR SOUTH CHINA COAL SWAP FOR Q2 ROSE 3.39% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.90 (+3.39%) per MT month over month and declined US$ 0.08 ...
Monday, 23 February 15
Q2' API 5 FOB NEWCASTLE COAL SWAP CLOSED $1 HIGHER THAN Q3
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 3.12 per MT (+6.44%) month over month and fall US$ 0.43 (-0.83%) w ...
Sunday, 22 February 15
THE BALTIC DRY INDEX LOST ALMOST 3.2% OR 17 POINTS WEEK ON WEEK
COALspot.com: The Baltic Dry Index, one of the economic indicators that monitors the health of the world's economy by tracking the price of shi ...
Friday, 20 February 15
GOVT SET TO INCREASE COAL OUTPUT TARGET THIS YEAR - JAKARTA POST
The Energy and Mineral Resources Ministry is planning to increase its coal output target this year as the government seeks to offset the ongoing de ...
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- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Antam Resourcindo - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Therma Luzon, Inc, Philippines
- ASAPP Information Group - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Australian Coal Association
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Deloitte Consulting - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- PTC India Limited - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- The University of Queensland
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- MS Steel International - UAE
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
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