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Friday, 19 June 15
INDONESIA'S COAL-TRAFFICKING PROBLEM REQUIRES IMPARTIAL INQUIRY - JAKARTA GLOBE
 Indonesia, the leading supplier to the seaborne thermal coal market, produces 420 million tons of coal per year, according to its official tally.
But the unofficial tally is much higher.
It’s an open secret, in fact, that millions of tons of Indonesian coal are being mined and shipped out of the country illegally. Last year at the Coaltrans Asia conference in Bali, R. Sukhyar, the minerals and coal director at Indonesia’s Energy and Mineral Resources Ministry, estimated such shipments totaled 50 million tons to 60 million tons annually. Other estimates put annual illegal shipments as high as 90 million tons, worth some $5 billion.
Whatever the exact amount, the government of Indonesia is losing hundreds of millions in royalty revenues each year on these illegal exports. Coal royalties are important to the fiscal health of the country — they account for $4 billion of the Indonesian national budget of $170 billion this year — and government services suffer when royalty programs aren’t rigorously enforced.
Indonesia, of course, is an important global supplier of coal. More than 80 percent of its annual production is exported, mostly to India, Japan, South Korea and India, and its coal exports — both legal and illegal — affect global markets. Illegal exports create a special, pernicious effect on the coal industry as a whole by undermining efforts to manage supply and rebalance prices.
Coal markets today are shrinking rapidly. The price of coal in the Asian seaborne market has dropped by about 50 percent since 2011. The industry is oversupplied and likely to remain so for the foreseeable future. Illegal exports only exacerbate that challenge.
Epidemic of illegal shipping
The country’s process of licensing, customs and royalty collection maintains the official tally of annual coal production. But neither ports nor coal-transfer system are as tightly controlled as they should be. Opportunity abounds for producers to escape regulation. Much of the avoidance happens in Indonesia’s network of small private and unmonitored ports, and much of it occurs at offshore transfer points that are difficult to monitor.
The problem stems from the roaring days of global coal market expansion during the mid-2000s, when Indonesia saw a huge number of new companies, new permits and news investment in coal production.
Indonesian coal production skyrocketed to 420 million tons in 2013 from 174 million tons in 2006 in a difficult-to-manage boom that helped evasive companies get away with either ignoring reporting requirements altogether or simply under-reporting their coal production.
The government is raising coal-royalty rates in a move that will only magnify the competitive advantage royalty-avoiding producers hold over reputable companies that follow production- and export-reporting requirements. Thankfully, Indonesia’s illegal coal-export activity is under growing scrutiny today, although recent central government efforts at various reforms have done little so far to actually reduce illegal shipments.
Indonesian leaders seem well aware that unreported or under-reported exports undermine broader policy objectives of improving national energy security, providing sound management of Indonesia’s finite natural resources, having effective border control and showing leadership in international trade management.
Yet it’s unlikely the government will succeed on its own. Illegal coal mining and shipping is embedded in the economic fabric of Indonesia. Financially powerful interests support the status quo. Unreported or underreported activity has become a crucial source of revenue for regional political interests, and even the Indonesian Coal Mining Association (APBI) says it finds little to support in reform proposals. The drive to police illegal production and trafficking is also stymied by deeply endemic government corruption.
No level playing field
Indonesia and its people are currently being shortchanged by the absence of a business climate committed to a level playing field across its coal industry. Reform is in the national interest — and it makes good business sense, too, because it would tighten up the seaborne coal markets and provide some price stability for Indonesia’s largest source of export revenue.
When corruption is as pervasive as it is today in Indonesia’s coal industry, it is difficult to maintain a national effort to reform it. This is not an uncommon challenge, and is often best addressed by outside parties invited by the authorities to observe, report and enforce change. Reputable business, governmental and judicial officials are often brought in to help companies or countries find the right long-term path toward restoring confidence where confidence has been lost.
Many mechanisms exist to empower an independent organization with the authority to act. An external investigation of illegal coal shipping in Indonesia could go a long way to establishing a strong basis for establishing honest reform.
By Tom Sanzillo
About Tom Sanzillo
Tom Sanzillo is the director of finance at the Institute for Energy Economics and Financial Analysis (IEEFA), which promotes research into global energy markets. Sanzillo has 30 years of experience in public and private finance, including as a first deputy comptroller of New York State, where he held oversight over a $156 billion pension fund and $200 billion in municipal bond programs.
Source: The Jakarta Globe
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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- PTC India Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Wilmar Investment Holdings
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- GVK Power & Infra Limited - India
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
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