LOW RANK COAL BUSINESS

OPPORTUNITY IN INDONESIA
Dr. Simon F. Sembiring
Director General of Mineral Coal and Geothermal

Asia Pacific Symposium on Lower Rank Coal

Bandung, September 6 – 7, 2006

Directorate General of Mineral Coal and Geothermal

Department Energy and Mineral Resources
 Indonesia Oil Situation
1200
Million barrel
Consumption
6% /year

1000

800 Consumption
3% /year
Production Realization
600
Realistic
Production

400

Pessimistic Production
200

0
1980 1985 1990 1995 2000 2005 2010 2015 2020

Pessimistic Production Realistic Production High Consumption Exact Consumption

We need alternative energy !

 Toward Energy Mix 2025
2005 Natural Gas
29%

New Energy
4%
Coal Liquefaction
Oil
Coal 2%
15%
52%
Geothermal
5% 2025
Biofuel
5%
New Energy Natural Gas i
5% 30%

Oil
20%

Coal
33%
 Source: Centre of Geo Resources,
Resources 31 December 2005

Coal Resources and Reserves

1,58%

28,37%
7,58%
4,07%

40,13% 17,7%

Resources : 61.3 billion ton

Reserves : 6.7 billion ton
 Indonesia “Energy Mix” and
Condition Toward 2025
• Presidential Degree on National Energy Policy endorsed
recently, 25 January 2006
• Reduce oil share from 55% (2005) to less than 20% in
2025
• Increase in 2025 in the use of :
– Coal from 15.7% to more than 33%
– Liquefied Coal to more than 2%
– Natural gas from 23% to more than 30%
– Geothermal from 1.9% to more than 5%
– Biofuel to more than 5%
– Other New and Renewable Energy from 0.5% to more than 5%
• Reduce energy consumption intensity by 1% annually
• Improve energy infrastructure condition
 REGULATION ON NATIONAL COAL
DEVELOPMENT

¾ Decree of Minister No.1128 K/40/MEM/2004

regarding National Coal Policy dated 23 June
2004
¾ President Regulation No 5 Year 2006 regarding
National Energy Policy
¾ Instruction of President No.2 Year 2006
regarding Coal Liquefaction
¾ Preparation of Law on Mineral and Coal (under
discussion with Parliament)
 Indonesian Coal Program
™ Convert the diesel-fired power plants, which have 7,753 megawatts
(MW) capacity, into coal-fired plants and build 10,000 MW-capacity
new coal-fired plants in year 2010, total demand of Low Rank Coal for
development of power plants is 53.259.000 Ton, calorific value
between 4300 – 5000 kCal/kg for 17.753 MW electricity. The total
demand of coal for electricity, in year 2015 will be 90 million tons and
in 2025 it will reach 200 million tons.

™ Utilization of Low Rank Coal :

ƒ Mine mouth plant
ƒ Coal Liquefaction
ƒ Coal Gassification
ƒ Up Grade Brown Coal (UBC)
ƒ Coal Bed Methane
ƒ Etc
™ Coal briquette for small and middle industries

™ Development of Integrated Coal Transportation System to link

between coal mines and terminals, which are located in the southern
part of Sumatra, and the whole area of Kalimantan.
 BASED ON CALORIFIC VALUE (Cal/gram, adb)
[Government Regulation No. 13, Year 2000 and No. 45/ 2004]

¾ Low Calorie : < 5100

¾ Medium Calorie : 5100 – 6100
¾ High Calorie : 6100 - 7100
¾ Very High Calorie : > 7100
11
 Coal Production Growth
2005-2025
350 318

300 283
257
250 216 214

200 177
169 Domestic
150 148
150 124
Export
106 115 109 106 104
101 Production
100
41 46
50

0
2005 2006 2010 2015 2020 2025

Note:
• 2009 – 2010: PLN need Sub bituminous Coal ± 30 millions (Existing Plant) and Lignit/Low
Lignit/Low
Rank Coal (LRC) ± 59 millions (Acceleration Project).
• For Electricity, 2015 – 2025 growth (2-
(2-5)% per year.
• Domestic use, 2010 – 2025 growth 3-
3-5% per year
 COAL DOMESTIC CONSUMPTION 2005-2025
2005 2010 2015 2020 2025 Juta ton

1. Electricity 31.0 85.0 93.0 103 113.0

2. Cement 6.5 10 11 13 17

3. Metalurgy industry
and Pulp Paper 1.5 7.0 10.0 11.0 12.0

4. Small Industries
1.0 5.0 7.0 9.0 10.0

5. UBC - 5.0 10.0 20.0 30.0

6. Liquefaction - 3.0 6.0 11.0 22

Total 40.0 115 148 177 214

*) Setelah 2010 pertumbuhan 2 % (Kompilasi data KBN dan PLN, 2006)

**) Setelah 2010 pertumbuhan rata-rata 12 % (Kompilasi data KBN dan Assosiasi Semen Indonesia, 2005)
Source: Centre of Geo Resources,
Resources 31 December 2005

Low Rank Coal

in Kalimantan

¾ Arutmin (Mulia, Asam2,

Sarongga)
¾ Adaro
¾ Kideko Jaya Agung
¾ Meruwai Coal
¾ Mantimin Coal
¾ Delma Mining Corp
¾ Bara Pramulia Abadi
¾ Multi Tambang Jaya
¾ Etc.
¾ Total Resources of
4.,121.68 Mil.
Tons

20
 LOW RANK COAL
IN SUMATRA

• PT. BA
(Arahan, Banko,
Muara Tiga Besar,
Suban Jerji, Banjarsari)
•Pendopo Energy Batubara
•Mifa Bersaudara
•Astaka Dodol
•Benakat Energy
•Hulubalang Inti Bumi
•Trimatra Coal Perkasa
•Etc.

• Total Resources of
Source: Centre of Geo Resources,
Resources 31 December 2005 9,103.86 Mil Tons
21
 Policies

Several policies that encourage the program

are as follows :

‰ Special incentive for investors using low rank

coal;
‰ Encouragement of infrastructure development
in the regions that produce low rank coal;
‰ Simplify process of coal mining permit for low
rank coal.
 Closing Remark
¾ Incentive for low-rank coal must be made clear to have
certainty, because in the future, the consumption of low
rank coal will increased tremendously.

¾ In general, there is no problem about the coal supply for the

energy mix, the greater demand can actually be fulfilled
from national production and existing coal resources.

¾ For the time being Indonesia still need big investment to

develop the potency on low-rank Coal and encourages all
private investment