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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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Sunday, 08 February 15
BDI FELL CONTINUOUSLY HIT A THREE DECADES LOW
COALspot.com: This week Baltic Exchange Dry Freight Index (BDI) fell continuously hit a three decades low.
The BDI continuously fell and was d ...
Friday, 06 February 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 1.1% FROM LAST WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 20.1 million short tons (mmst) of coal ...
Friday, 06 February 15
SHIP DAMAGED BY FIRE CAUSED BY PIRATES FOUND TO BE CONSTRUCTIVE TOTAL LOSS - TAYLOR WESSING
KNOWLEDGE TO ELEVATE
The High Court was asked to determine a number of preliminary issues, including whether a vessel was a constructive total ...
Thursday, 05 February 15
BDI HAS NOW FALLEN A LEVEL CLOSE TO THE INDEX'S HISTORIC LOW - INTERMODAL
They say a picture is worth a thousand words and in this instance just one look at the tables above is enough to understand the great pressure the ...
Thursday, 05 February 15
ULTRAMAX LEVELS FROM INDIA TO CHINA IN THE MID US$ 5000'S - FEARNLEYS AS
Handy
Despite the overall weak sentiment, there is a scent of optimism in the Atlantic market for ppt dates. Continent is still struggling with o ...
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- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- The Treasury - Australian Government
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Thai Mozambique Logistica
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- White Energy Company Limited
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
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