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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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- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- The University of Queensland
- CIMB Investment Bank - Malaysia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Siam City Cement - Thailand
- White Energy Company Limited
- Ministry of Transport, Egypt
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- MS Steel International - UAE
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
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