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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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Wednesday, 04 February 15
MARKET INSIGHT - LINOS KOGEVINAS
It has been just about over 2 months since, in a move that surprised many and caused widespread apprehension, OPEC decided to maintain its producti ...
Tuesday, 03 February 15
Q1'15 FOB INDONESIA COAL SWAP CLOSED $ 3.29 HIGHER COMPARED TO Q4'15 DELIVERY PRICE
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 rose week over week and month on month.
The Q1 swap up US$ 0.68 (+1.41%) month o ...
Tuesday, 03 February 15
FOB NEWCASTLE COAL SWAP FOR Q4 DELIVERY CLOSED 5.86% LOWER THAN Q1 PRICE
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery rose US$ 0.26 per MT (+0.51%) week over week and declined US$ 0.02 (-0.04%) ...
Monday, 02 February 15
API 4 FOB RICHARDS BAY COAL SWAP ROSE WEEK OVER WEEK
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has decli ...
Monday, 02 February 15
INDONESIA'S ADARO ENERGY PRODUCED 56.21 MILLION TONNES OF COAL IN 2014; UP 8% Y-O-Y
COALspot.com: PT. Adaro Energy, Indonesia’s largest coal producer, has increased coal production by 8% to 56.21 million tonnes (Mt) from both ...
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- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- The University of Queensland
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Australian Coal Association
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Economic Council, Georgia
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
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