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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, 12 February 15
INDONESIAN COAL PRICE REFERENCE INCHED DOWN 1.44% IN FEBRUARY
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down Indonesian coal bench mark price this month to US$ 62.92 pe ...
Thursday, 12 February 15
NEWBUILDING ORDERING ACTIVITY DRAGS ON, AS OWNERS ARE LOOKING FOR LOWER PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners appear to be waiting for lower prices in their dealings with Asian shipyards, as the dry bulk market is at historical lows. According t ...
Wednesday, 11 February 15
DRY BULK MARKET REMAINED UNDER PRESSURE : STABILIZING CAPE MARKET HARDLY HELPED SENTIMENT
COALspot.com: The Dry Bulk market remained under pressure last week, while the stabilizing Cape market hardly helped sentiment.
Greece based s ...
Wednesday, 11 February 15
BDI HITTING THE ALL-TIME LOW; FFA MARKETS NOT SHOWING ANY POSITIVE SIGNS
With the BDI hitting the all-time low and with FFA markets not showing any positive signs for a possible recovery in the near future, pessimism is ...
Tuesday, 10 February 15
IRON ORE MARKET TO REMAIN OVERSUPPLIED IN 2015: PRICE FORECAST $70/T - WOOD MACKENZIE
COALspot.com: With January witnessing the price of iron ore falling to its lowest levels since May 2009, Roger Emslie, Principal Metals & ...
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- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Bhoruka Overseas - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Bhushan Steel Limited - India
- Planning Commission, India
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Alfred C Toepfer International GmbH - Germany
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Global Green Power PLC Corporation, Philippines
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Australian Coal Association
- Economic Council, Georgia
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- White Energy Company Limited
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
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