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