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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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Saturday, 14 February 15
SHALE GAS AND TIGHT OIL ARE COMMERCIALLY PRODUCED IN JUST FOUR COUNTRIES - EIA
KNOWLEDGE TO ELEVATE
The United States, Canada, China, and Argentina are currently the only four countries in the world that are producing com ...
Friday, 13 February 15
U.S. WEEKLY COAL PRODUCTION SHOWS 10% DECLINE
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.1 million short tons (mmst) of coal ...
Friday, 13 February 15
SMALL AND MEDIUM-SIZED SHIP OWNERS SQUEEZED OUT OF THE MARKET ON CRASHING DRY BULK MARKET AND EUROZONE CRISIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Financing issues have started to tighten the noose in the throats of small and medium-size ship owners, who were already facing problems over the p ...
Thursday, 12 February 15
CAPESIZE: THE BEST DESCRIPTION FOR THE MARKET IS, FLAT - FEARNRESEARCH
Handy
The handy and supra market is also being affected by the marginal volume of activity in the commodity sales. We see a small upturn in the T ...
Thursday, 12 February 15
DRY BULK OWNERS SCRAP MORE VESSELS, AS MARKET REACHES HISTORICAL LOWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has reached historical lows this week, with the Baltic Dry Index (BDI) now trading at levels below operating expense levels for ...
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- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Bukit Makmur.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Oldendorff Carriers - Singapore
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Electricity Generating Authority of Thailand
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- White Energy Company Limited
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- The University of Queensland
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Kartika Selabumi Mining - Indonesia
- PTC India Limited - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
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