RECLAMATION OF EX –MINING AREAS OF KPC

COAL MINING IS NOT JUST DIGGING UP THE SOIL

By : Ardian Taufik Gesuri | May 6, 2019 | Kontan

A twin otter plane was roaring, piercing the clouds, shaken up many times like an off-road
vehicle. The sound was so deafening that it was still penetrating the eardrums although ears
were tightly closed.

Luckily, the journey did not take long that a dozen of friends on the journey did not throw up or
suffer from the vomit sensation. The plane belonging to the Hevilift Airline finally almost arrived
at Tanjung Bara Airport, Sanagatta, after travelling nearly an hour from Balikpapan, crossing
Samarinda, Friday (26 April)

The land view from the above looked greener. There were a lot of plots of land intended for
gardening, but seemed abandoned. There were also a great many holes resulting from mining
activities, which were intentionally left wide open, poised to swallow anything.

Getting closer to Sangatta, however, the forest density can again be seen. Spread out was a
neatly designed and well-maintained 18-hole golf course.

Sangatta, East Kalimantan, is a city which is flourishing, along with the presence of coal mining
of PT Kaltim Prima Coal (KPC). This area of 35,747.5 square kilometres becoming the capital of
East Kutai now has a population of around 250,000 people.

KPC, a subsidiary of PT BUMI Resources Tbk (BUMI) reportedly has made a lot of contribution
to this town, such as supplying excess electrical power of 18 MW from the Steam Power Plant
Tanjung Bara 3 x 18 MW, supplying clean water from Bening Lake which flows to the Regional
Drinking Water Company Tirta Tuah Benua, establishing the Regional Public Hospital Kudungga
Sengatta, cow farms, chicken farms, and still a lot more (see KPC track record).

Rehabilitation in the world’s largest coal mining site was already designed since the concession
was held by Rio Tinto and BP in 1993. They commenced the mining process by clearing land,
cutting trees, opening land using heavy equipment. But not merely digging up the soil until it
was used up, they transported the top soil to the stockpile. It is the top soil that was brought
back to the reclamation area. “The maximum thickness is 1 Meter,”said Untung Prihardiyanto,
GM Mining Support Division of KPC. After being coated with the top soil, trees can be planted
on said area instantly.

Lesson from KPC

These Good mining practices continued to be adopted when BUMI acquired KPC from Rio Tinto
and BHP in 2003. According to Dileep Srivastava, BUMI Director and Corporate Secretary, KPC
is highly aware of environmental awareness (green, going green, and living green). Up to now,
KPC has carried out reforestation activities on 10,013 hectares (accounting for 39%) of total
affected land measuring 25,659,2 hectares. A major part of the reclamation consists of normal
reclamation, i.e rehabilitation for restoring the function of nature and its ecosystem.

Reclamation for this year includes management on a land area measuring 423.6 hectares, part
of which has been planted with a variety of 145,400 trees, giving a total of 6.56 million planted
seeds. “Carbon absorption rose significantly, said Dileep.

It’s not surprising that in part of the re-greened KPC concession area of 90.938 hectares,
various kinds of animals came attracted. People oftentimes see long tailed monkeys, macaques,
deer, Javanese gibbons, wild boars, to sun bears roaming around the trees. In the morning,
birds with beautiful feathers sing very beautifully. Sometimes, the orang-utans came to the
settlements of the local people.

Not only did greening take place in mining concession areas with the status of “other purposes”
area (APL). KPC also turned its ex-mining areas into lakes which are very useful or beneficial for
the local people. Through projects such as building dikes, water channels, as well as pump
installation worth a total of US$ 1.88 million, a water tank or reservoir was constructed, being
used as a source of clean water. As a result, the Regional Drinking Water Company of Sangatta
may reap or generate income of Rp 1 billion a month from the water processed therefrom.

KPC also turned its mine holes into lakes or natural tourism sites, such as Batu Arang Lake. The
270- hectare area gives fresh and cool air, with the lake being surrounded by shade trees.

Apart from enjoying water tourism, visitors can set up tents on the side of the lake. A variety of
freshwater fish breeds freely in the 35-meter wide lake.

To date, the natural tourism site of the Batu Arang Lake is still managed by KPC in cooperation
with Sangata Baru Foundation, not yet handed over to the regional government of Sangatta.
“We must first make sure that the regional government is ready, particularly in terms of the
safety of the visitors, only then can we hand it over to the them, explained Wawan Setiawan,
GM External Affairs & Sustainable Development of KPC.

Mining undoubtedly deals with the activity of digging the soil, but KPC - producing nearly 80%
of 80.3 million tons of BUMI’s coal - feels responsible. It will not easily abandon the gaping
holes after extracting the natural resources contained therein. Any reclamation and
rehabilitation activities in its mining areas must be fully completed, so as to benefit the
ecosystem.

The message is: no fateful incident like the death of children drowning in the ponds resulting
from abandoned illegal mines.

“Samarinda may take a lesson from KPC in managing mine areas, said Dileep.
KPC Track Record

 Total revenue of BUMI in 2018 reached US$4.92 billion. KPC contributed US$ 3.82
million and Arumin of US$1.1 billion.
 BUMI sold 80.3 million tons in 2018, which translates to 220,000 tons per day , with KPC
selling around 170,000 tons per day.
 KPC largest consumers are: domestic markets, accounting for 28.5%, followed by India
20.5%, China 15%, Japan 9.5%, the Philippines 5.6%, and the rest are countries, such
as Malaysia, Taiwan, Thailand, Korea, Italy, Brunei Darussalam and Pakistan.
 BUMI (KPC and Arutmin) contributes the most to the national exchequer. In 2018, BUMI
was estimated to have contributed between US$1.3 billion to US$1.5 billion to the
government through the payments of royalties, taxes, levies, and subsidies.
 BUMI pays royalty 4.5 times higher than Freeport Indonesia, 2 times higher than Adaro
(2nd ranked coal producer in Indonesia), and total tax of BUMI is still higher than the
combined amount of Adaro, Kideco and Berau
 Coal Resources of KPC reached 7.05 billion tons, with reserves of 1.18 billion tons. Out
of the reserves, 948 million tons are situated in Sangata and 230 million tons in
Bengalon.