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government to look for alternative sources of energy. The government, which has subsidized oil fuel (BBM). The subsidy swells with the soaring prices of oil and growing consumption. The government is now aware that it has been late in seeking to develop cheaper alternative sources of energy such as coal that could be used to fuel power plant, cement plant and steel plants. Ads by GoogleSmycken & Smyckesdelar Köp smycken online i vår webbutik. Snabba Leveranser & Bra Priser. Köp
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The government lately has been more serious in seeking to reduce oil consumption and use coal, which is much cheaper to generate power. The government plans to build coal fired power plants (coal PLTU) with a total capacity of 10,000 megawatt of electricity power in the next three years The plan has boosted coal production in the country. World's second largest exporter The soaring oil prices also lifted the prices of coal in the world market to an all time high in 2005. Currently, Indonesia has become the second largest producer of coal in the world after Australia. Three years ago, Indonesia was only the fourth after Australia, China and South Africa. The country's production of coal has risen fast in the past decade. In 1992, the country's coal exports totaled only 15.2 million tons valued at US$ 602.6 million, up to 73.1 million ton valued at US$ 1.76 billion in 2002. In 2005, exports already reached 105 million tons. Little Interest in Investment Indonesia is now the second largest exporter of coal in the world but it is only the seventh in production. The country's coal reserves are only 0.5% of the world's total reserves placing the country outside the ten largest in the world. Under the present production rate the country's proven reserves will be depleted in 37 years if no new reserves are found. Currently Indonesia is exploiting its coal reserves for the consumption of other countries. It is feared, therefore, some day the country may have to import coal. The coal market is firm, the price is high and demand growing, but there is little interest shown by investors in coal mining venture. Investors are especially discouraged by unfavorable policy and regulations adopted by the government. Currently, the government and the House of Representatives are still studying and preparing a draft law on coal mining. It is not known when the bill will become law. Meanwhile, investors want to see legal certainty in the mining sector.
Environmental damage Illegal mining has been rampant causing problem to investor and damage to the environment. Illegal mining was held responsible for extensive damage to the environment in coal mining areas in East Kalimantan and South Kalimantan. Illegal miners destroyed protected forests and steal coal from the mining concession of investors. Coal Market in the World Large energy demand in fast growing China and India has contributed to a surge in demand for coal in the world market. Coal demand has also increased in Asean countries, which also are looking for alternative sources of energy to reduce consumption of oil. In the past 5 years, coal trade expanded in volume from 609 million tons in 2000 to 755 million tons in 2004. In 2004, the world's coal consumption was estimated to reach 4,646 million tons. Part of the coal supplied to the market is the type of steam coal used as a source of electric energy and for boilers. Coking coal is used as fuel for steel factories accounting for only 12% of the total coal consumption in the world. Indonesia has put behind China and South Africa in coal exports as the two countries have reduced their exports with the growing domestic consumption. China, with production of almost 2 billion tons of coal, was the world largest producer in 2004, but it was also the largest consumers followed by the United States and India. The world's production of coal in 2004, was estimated to reach 4,629 million tons, up 9.4% from 4,231 million tons in 2003. The production did not include brown coal or lignite, which has low calorific value. Based on data issued by the World Energy Council, Indonesia has proven coal reserves of only 4.97 billion tons or 0.5% of the world's total proven reserves. However, according to the Ministry of Energy and Mineral Resources, the country proven coal reserves total 6.9 billion tons. World Energy Council has proven coal reserves of 909 billion tons including 246 billion tons in the United States, which has the largest reserve in the world. Structure of Coal Mining Industry in Indonesia Types of Coal and Specifications There are two different types of coal--hard coal and brown coal or lignite: ** Hard coal has a calorific value of more than 5,700 kcal/kg (23,26 MJ/kg). Hard coal consists of steam coal, coke, bituminous coal andanthracite. ** Brown coal has a low calorific value including lignite and sub bituminous coal that can be used as fuel for power plants.
865 kJ/kg (5. East Kalimantan and South Kalimantan.860 kJ/kg (5. South Sumatra has the largest coal deposits Coal reserves are found in various areas in Sumatra. Steam coal includes anthracite and bituminous coal. but with the soaring prices of coal.** Steam coal is used by boiler/steam generators and heating ovens. According to a latest estimate. Previously coal mining was done only by two state companies which were later merged into PT Tambang Coal Bukit Asam (PT BA). PT Kaltim Prima Coal. The largest deposits are found in South Sumatra.700 kcal/kg). Its Gross Calorific value is larger than 23. Sulawesi and Papua. The first working contract was signed in 1983 by 10 companies of which 9 already producing at present such as PT Adaro. Indonesian coal is known to have low dust and sulfur contents. It has the characteristics like those of steam coal. Lignite is often called Low Rank Coal. or Brown Coal.435 kJ/kg (4165 kcal/kg) and 23.9 billion tons that were considered profitable. PT Arutmin. ** Sub bituminous coal has a gross calorific value of 17. ** Coke is the result of carbonization of steam coal under high temperature. Status of coal mining companies Coal mining industry has expanded fast after the government invited foreign investors to venture in coal mining in 1983 under working contract. Kalimantan.4 billion or the same as the measured deposits. therefore. Most or 83% of them have brown coal in the category of lignite and sub-bituminous. the reserves considered feasible for exploitation have increased to 12. Most coal deposits in the country date back to the tertiary age formed 65 million years ago. is more suitable to function as fuel or as steam coal causing less pollution. Indonesia has a total reserve of 57 billion tons but proven reserves are only 6. Its gross calorific value is larger than 23. ** Anthracite is the highest in quality with calorific value of more than 6900 kcal/kg. with a small part (20%) in the categories of Bituminous and Anthracite. (KK).700 kcal/kg).165 kcal/kg (17.865 kJ/kg (5700 kcal/kg). Coke is used as a redactor in steel smelting. Java. ** Coke could be used as a reductor in blast furnace. which free from dust. ** Lignite has a gross calorific value of less than 4.44 MJ/kg) containing volatile matters of more than 31% in dry form. which now dominate coal .
Generation I contractors control coal resources Most coal resources in the country are controlled by first generation contractors and state coal mining company PT Tambang Coal Bukit Asam (Persero). and contracts. based on their contract are required to divest the majority of their shares to local partner after operating for more than 10 years. but now only 83 of them still active including 27 already producing coal. For example. 22 in 1999. Later the government signed second generation of KK between 1993 and 1996 with 18 other companies of which 8 have been operational and 4 have quit or cancelled investment. PT Kaltim Prima Coal. In 1996. Most of the present coal producers are from the third generation of working contract (KK). for foreign and domestic contractors. One of the changes concerned Coal Cooperation Contract/CCC becoming Coal Contract of Work (CCOW). It was also regulated that contractors (KK) and (PKP2B) are required to hand over 13. however. Based on the law No. PT Yamabhumi is the only one signing working contract in West Kalimantan and finding large coal deposit of 4. The government has also issued regulation on small mining companies holding coal Mining Authority (KP). KP holders include firm with the status of limited company and cooperatives.5% of their production in cash to the government (based on GOB prices). more than 140 companies signed working contracts. simplification of procedure. in line with their respective authorities. Among the holders of Generation III contract there are only two contractors having coal resources of more than 1 billion tons of coal namely PT Pendopo Energi Coal in South Sumatra and PT Yamabhumi Palaka in West Kalimantan. The divestment process. is not always running smoothly. but the largest producers are from the first generation. 85/1996. The government also issued a presidential decree No. The authority over coal mining (KP) and coal mining working agreement (PKP2B) is held by the minister in coordination with governors and regents/mayors. returning the authority over coal mining previously held by PT Persero Tambang Coal Bukit Asam (PT BA) to the government represented by the General Mining Directorate General. regents are authorized to issue KP license for to operate small mines.production in the country. which. 75/1996.21 billion tons. but the two companies are still in the process of explorations. PT Kaltim . through a presidential decree No. the largest coal mining company Large coal mining companies generally hold the first Generation Working Contract and they are generally foreign investment companies. Until 2005. renew coal mining pattern covering investment aspects through deregulation.
Lately. PT Borneo Lumbung Energi became the country's largest coal producer. Deutsche Bank earlier seized the stake from the Swabara Group and sold it to Dianlia. which is the fourth largest coal mining company. which is owned by Edwin Soeryadjaya. many coal mining companies. With the take over of KPC and Arutmin from Bumi Resources. in Mach. also faced dispute among its shareholders over the sales of the former stake of the Swabara Group by Deutsche Bank to PT Dianlia. Bumi Resources decided to sell its entire stake in PT KPC and PT Arutmin to PT Borneo Lumbung Energi at a price of US$ 3. KPC has a measured reserve of 525 . As a result many investors tumble over each other to take control of a coal mining company now. Bumi. after selling its productive assets acquired PT Pendopo Energi. but not yet producing. Bumi Resources acquired the entire shares of PT Kaltim Prima Coal through its subsidiary Sangatta Holdings Limited and Kalimantan Coal Limited. could not yet finished the process of divestment after years of negotiations. Bumi plans to build a coal liquefaction plant using coal to be supplied by PT Pendopo Energi Batubara in South Sumatra. making it the country's largest producer of coal producing up to 45 million tons of coal in 2005. the country's second largest producer. which has big reserves of high quality coal. both former consultants. Based on a study in 2005. which almost collapsed in the wake of the monetary crisis in 1997/1998. PT Borneo Lumbung is a unit of an investment company PT Renaissance Capital. Bumi Resources decided to sell 95% stake in PT Kaltim Prima Coal (KPC) and 100% stake in PT Arutmin Indonesia. 2006. but the process was delayed as the East Kalimantan regional administration has not yet fully accept the agreement reached between KPC and the central government. However. KPC started commercial operation in 2992.2 billion. Bumi Resources Group/ Borneo Lumbung Energi PT Bumi Resources (PT BR) became the country's largest producer of coal after acquiring KPC and PT Arutmin Indonesia. PT Adaro. therefore it should have sold 51% of its shares to local investors in 2002. With the surge in the prices of coal. the country's largest coal producer and exporter.9% later from PT Ekakarsa Yasakarya Indonesia. PT Bumi Resources acquired 80% of Arutmin from BHP Mineral Exploration Inc in 2001 and bought the remaining 19. was established by Rio Tinto and BP in 1991 and began operation in 1992 with three coal mines namely Sangatta. The concession area of KPC is located in the area called Pinang Dome. which is partly owned by Suryadinata Sumantri and Samin Tan. In 2003.Prima Coal (KPC). which has large coal reserve in South Sumatra. now regain strength with bright prospects. Melawan and Bengalon mines. Kaltim Prima Coal PT Kaltim Prima Coal (PT KPC) in East kalimantan.
The job of mining is handled by Thiess Contractors and PT Pama Persada in Sangatta and Melawan. which was established by BHP Mineral Exploration Inc. which hold high calorie coal of 6.00 Kcal/kg and Asamasam having coal with a lower calorific value of 5.1%. Its coal mines are in Tanjung. KPC operates one of the largest open pit mines in Indonesia with a depth of 0. coal production of PT KPC totaled 28.8 million tons of coal and 93% of the production was exported to Japan. South Kalimantan. Now Arutmin operates four coal mines in East Kalimantan namely Satui.million tons and indicated reserve of 76 million tons and potential reserve of 601 million tons. The coal mines have a total reserve of 3 billion tons but commercially exploitable deposits are only 600 million tons. Arutmin has started deep mining in that area and move more activity to mines having coal with low calorific value. which is suitable for power plant fuel. Coal produced by KPC has a calorific value of 5048--6988 Kcal/kg. In 2005. Around 89% of its sales are on contract. . Its largest mine in Sanggata is equipped withconveyor belt of 13. Arutmin PT Arutmin. 2004. therefore. Adaro Coal PT Adaro was established by Australia New Hope Corporation in cooperation with Swabara Group through PT Asminco Bara Utama.15 -15 meters. Around 79% of its sales are on contract and 21% are disposed of on spot market. Of the total. Its coal layers are thick as thick as 30 meters as against 6 meters in other deposits.2 km between the mine and its coal piling terminal in Tanjung Bara from which coal is shipped to buyers.2% and low nitrogen content that it is good for power plant fuel. The coal mines of Arutmin are closer to the coast . which started production in 1991. Arutmin produced 16. therefore. In Bengalon. Senakin and Batulicin.2 million tons relegating PT Adaro as the largest producer in Indonesia. ash content of 1.00-6. Around 97% of its production is exported mostly to be used as power plant fuel. Currently the Satui mine has exceeded its peak productivity.000 kcal/kg. In 2005. Hong Kong and Europe. the coal reserves of Arutmin totaled 538 million tons including 253 million tons in proven deposit and 105 million tons in probable reserve. transport costs are cheaper and the ground is sloping that stripping is easier. The terminal could accommodate 220.000 DWT ship. was a pioneer among coal mining contractors holding the Generation I working contract. KPC named PT Darma Henwa as the contractor. 170 million tons are thermal coal with low content of sulfur and 250 million tons are sub-bitumen with low calorific value. By June. The company signed its working contract in 1981. Its coal has a low sulfur content of 0. Its coal product is sold with the brand of Envirocoal.
2%. it has to build road as long as 74 kilometers to the stockpile place and to the Barito river from which the coal is transported with barges. Ltd.8%. Its coal production is transported by trucks to a coal terminal in Tanah Merah spanning a distance of 39 kilometers. In 2005. It operates in Pasir.2 million. It hardly need exploding. Deutsche Bank sold the shares in 2002 to PT Dianlia Setyamukti. It has long term contract to supply coal to a number of power plants in Korea. excavators. In 2002. therefore. an international consortium made up of the Government of Singapore Investment Corp. MEC from the United States 8. and Citigroup Inc. the shareholders of PT Adaro included PT Dianlia Setyamukti 51%. Its type of coal is similar to that of Adaro with low sulfur and ash content. East Kalimantan. over failure to repay a debt to the bank following the monetary crisis.7 million tons of coal. mining cost of cheaper. Around 65% of its coal production is exported such as to Taiwan. However. and New Hope Corp from Australia 40. Asminco borrowed US$ 100 million from Deutsche Bank to buy the shares of Adaro from PT Tirtamas Majutama and PT Panca Muspan using the shares as collateral. it is good to fuel power plants. acquired the stake of PT Dianlia at a price of US$ 950 million. China and India. Adaro ownership was taken over from Asminco by Deutsche Bank. After the take over. When the coal prices rose.Teodore Rachmat and a number of other businessmen at a price of US$ 42. therefore. Kerry Group. The price was much to low especially if compared to the selling price of KPC and Arutmin of US$ 3.1 million tons. loaders and trucks.9 million tons in the previous year. In June. and Adaro posted handsome profit. which is owned by Edwin Soeryadjaya. the company produced 18. up from 16. . From South Korea.PT Adaro operates open pit mines using bulldozers. the old owners accused Deutsche Bank of selling the shares at much too low price. The rest is sold to power plants of PLN or IPP. compared to he selling of the stake of New Hope to PT Dianlia and the selling of the shares again t the foreign consortium. New Hope agreed to sell the shares of PT Adaro to its local partner at a price of US$ 378 million. 2005.2 billion by Bumi Resources.. The company has a reserve of 809 million tons. In 1997. The majority of its shares are held by energy company Samtan Co. Kideco PT Kideco Jaya Agung holds the first Generation KK. Adaro produced 26. Kodeco has open pit mines. Goldmand Sachs Investment Inc. The legal suit against Deutsche Bank is still in process in a Singaporean court. With the take over. In 2005. Early 2005.
2%). PT Indika Inti Corpindo. largest coal producer in the country after Bumi.4 million tons to the production. however. Lignite dominates or 57. which signed its contract of works in 1982. PT Indominco Mandiri contributed 7. formerly owned by Sudwikatmono. which has a reserve of 45 million tons and Trubaindo with a reserve of 52 million tons and Jorong 36 million tons. was required to divest the majority of its shares to a local investor in 2003. the Banpu Group is the fourth. and 91 million tons in Ombilin. South Sumatra and the Ombilin unit in Sawahlunto. PT Jorong Barutama 3 million tons. all already operational. the Banpu group produced 12. PT Bukit Asam PT Tambang Batubara Bukit Asam (Pesero) Tbk. and bituminous (5. and PT Source Mitra Jaya 5%.7% of its coal reserves. Chinese investor indicated interest in exploiting the deep mine of Ombilin. PT BA has large coal reserves namely 1. After the process of open tender. It began operation in Indonesia in 1991. Trubaindo 1. Now the shareholders of Kideco are Samtan Co.4 million tons of coal. which is still in the phase of feasibility study. also a coal mining contractor. plans to sell the two companies as their operating cost is too high. 49%. One of his children Agus Lesmono founded the Indika Group to carry on the family business. Later its acquired a number of mining companies n Indonesia such as PT Indominco Mandiri .6 million tons and Kitadin 0. 569 million tons in Cerenti. In 2005. In cooperation with PT BA and Huadian Group the Indika Group also plans to build a power plant in Sumatra.The company.5 billion tons including 873 million tons in Tanjung Enim. West Sumatra. The Banpu group hopes to increase its production especially from Indominco. The Ombilin unit is a deep mine now no longer exploited. Banpu Group The Banpu Group is a Thai company operating in coal mining industry. PT Trubaindo and PT Kitadin. Earlier.3 million tons. The Banpu group. . Indika Group is an offspring of the Subentra Group.65 million.1%). and Kideco. The Banpu group also has two mining companies Sumatra namely PT Bara Sentosa Lestari and PT MPN. Ltd. With four coal mining subsidiaries already producing. Adaro. followed by sub-bituminous (37. PT Indika Inti Corpindo 41%. is a state company established through a merger of two state companies Tambang Batubara Bukit Asam and Tambang Batubara Ombilin. succeeded in taking over 41% stake in PT Kideco Jaya Agung at a price of US$ 149. It signed the first generation KK with the government through PT Jorong Barutama Breston to operate in South Kalimantan. PT BA has two mining units namely the Tanjung Enim unit in Tanjung Enim.
production rose 14. In June 2006. Coal from Tanjung Enim is transported by railway over s distance of 400 kilometers to the Tarahan port in Lampung from which the coal is shipped over the sea. Berau Coal has a large reserve of 745 million tons. plan to build new rail track to increase the transport capacity from the mine. PT BA planned to acquire a number of coal mines in Kalimantan. which is owned by Jodiono Tosin (former executive of theSalim Group). Kalimantan. Coal production of KK companies rose 16% annually from 61 million to 132 million tons. but now he plan was postponed as the government plans merger of three state mining companies PT BA. The company has built 33 kilometers of road to facilitate transport of coal to a barge terminal in Suaran from which coal is loaded to ship in the sea. PT United Tractors sold its shares in the Berau Coal to PT Armadian Tritunggal. which operates in Berau. In 2004. Berau Coal PT Berau Coal. David Lansa (the owner of PT Bumi Makmur. coal.2 million tons. and PT Aneka Tambang.3% annually--from 77 million tons to 150 million tons.2 million tons a year while PT BA wants to increase its shipment to 10 million tons a year to Suralaya. the coal mining contractor of PT Berau Coal).6 million tons in 2005.Most of coal production is disposed of on the domestic market mainly to supply the Suralaya PLTU in Banten. The soaring oil prices contributed to the increase in demand for coal boosting production in . and Rizal Risjad (of the Risjadson Group). Production Aspect Coal Production up 14.3% annually The country's coal production has increased rapidly in the past five years with KK companies the largest contributor. the Farallon Capital and a number of Indonesian business leaders were reported seeking to take over Berau Coal from PT Armadian Tunggal but no confirmation of he report. therefore. hold the first Generation KK signed in 1983. PT BA. In the past three years its coal production dropped from 10 million tons in 2003 to 8. In 2005 its production totaled 9. PT Timah. In the 2000-2005 period. Transport has often causes a problem especially as the railway could only carry 7. The company was established by PT United Tractors and its Japanese partner Nissho Iwai.
which produced 27. generally has lignite and sub-bituminous coal.the country. which is expected to push up its annual production and keep it as a lead producer. Mining could be made only by removing the upper layer of the ground. Individually.4 million tons. KPC has opened a new mine in Bengalon. followed by PT Adaro.7 million tons. Coal from East Kalimantan is highly competitive because of its closer proximity to growing markets in Asia. West Sumatra. Deep mines generally have bituminous and anthracite coals with high calorific value. which have low calorific value. is needed to create tunnel.1 million tons. In 2004 PT Adaro was still the largest producer.2 million tons and PT BA 8. Production by companies Indonesia's coal production is more than 80% dominated by six producers--Borneo Lumbung Energi (owner of KPC and Arutmin) turning out 45 million tons in 2005.64 million tons in 2005. Deep mining is used when the coal lies more than 10 meters below the ground up to 100 meters. therefore. East Kalimantan is the largest producer turning out 77 million tons in 2005. Demand for lignite or brown coal is expected to increase especially from PLTUs in the country. Process of mining coal and transport . Open pit mines. Production by provinces Kalimantan accounts for more than 90% of he country's coal production. Open pit mining is used when coal is found less then 10 meters below the ground surface generally 5-6 meters below the ground surface. By provinces. Banpu Group 12.6 million tons. followed by Adaro with production of 26. Sawah Lunto. Technical Aspect Coal mining methods There are two coal mining methods--open pit mining and deep mining. the largest producing company is PT Kaltim Prima Coal (PT KPC). Drilling. Kideco 18. Most coal mines in the country are open pit mines both in Sumatra and Kalimantan. Berau 9. Exploitation of deep mines in Indonesia has been made only in Ombilin.
Process of coal mining generally includes removal of the cover layer.000 DWT barges. The Tarahan Port in Bandar Lampung has a 42. most of inland coal transportation is conducted by trucks and barges. PT Bukit Asam is using railways from their stockpile in Tanjung Enim to coal terminal in Tarahan.5hectare area with a capacity of 2. one panamax terminal and three handy-size terminals. KPC and Indominco havecaptive coal terminals. trucks or railway or barges or through pipes after being mixed with water.000 DWT). Indonesia operates 24 coal loading terminals. where no railways exist. In South Sumatera. The third port port is located in Padang West Sumatera to serve their Ombilin coal mines. The first has to be removed. Coal international trade in 2003 totaled 700 million tons and 90% of which were transported by sea.000 DWT vessel. Mining operation covers: ** Land clearing and removal of the ground upper layer to be used later for reclamation after the mine is closed. The closer the coal layers to the ground surface the lower the stripping ratio and the cheaper the mining cost will be.000 DWT) to ones measuring Capesize (80. with a total export capacity . mining. Currently. ** Digging Shovel and trucks are needed in open pit mining.000+ DWT). Sea transport may contribute up to 70% to the total transport cost of coal. Processing of coal washing is aimed at guaranteeing quality to meet requirement. At present Indonesia is producing coal in Sumatera and Kalimantan Island. The Kertapati Pier ha a 1. including three cape-sized terminals. reclamation and transport to piling terminal before the coal is shipped to the final destination. Panamax (60-80.5 million tons / year and is able to moor an 8.5 ha area with a capacity of 12 million tons/year and is able to moor a maximum of 80. Coal Transportation Coal is transported with conveyor belts. After he processing coal is sent to piling place and to be ready for shipment to end users. Stripping ratio (SR) is a ratio in m3 of soil to be removed to produce 1 ton of coal. ** Processing and Piling Coal directly from mines called run-of-mine (ROM). Their coals are forwarded to the coal terminals by trucks and belt conveyors. Exports are transported with ships with the types of Handymax (40-60. Lampung. In Kalimantan. PT BBA has three coal terminals. The coal mines of PT Adaro have a low SR of 3-4 and that of PT KPC have a stripping ratio of 6-8. often contain undesired materials like rocks. and mud.
Four additional coal terminals are planned. a 500. TBCT is located in north Samarinda. is located on South Pulau Laut. such as Multi Harapan Utama. The terminal jetty is capable of handling 80. Sebuku by Cakrawala Sebuku. IBT has a stockyard capacity of 800. West Java. developed jointly by Consolidated Bulk Handling of Australia and Terminal Batubara Indah. * Spreader to spread the ground in piling place.000 MT capacity stockpile. Government is preparing a study to bulit a railway system in Kalimantan particularly to tranport the coal from Central. In open pit mining by major coal mining companies PT Bukit Asam and PT Arutmin the main types of equipment are as follows: * Bucket wheel excavator as digging equipment .000 MT and a handling capacity of one million MT/year. is the latest common-user deep-water port. and South Kalimantan. was developed by KPC to load its own coal production into ships of up to 200. Equipment needed Technology and equipment needed in coal mining depend on the types of the mines and the size of the mining. Bontang by Indominco Mandiri and East Kalimantan by Indexim. with a capacity to handle 200. It lies on major domestic and international shipping routes. IBT. a large island off South Kalimantan. . IBT is expanding its storage capacity to 1. East Kalimantan. ** The Indonesia Bulk Terminal (IBT). ** PT.000 DWT vessels. Below is a list of the largest coal loading ports currently in operation in Indonesia. an independent company. Kitadin.000 DWT bulk carriers. East Kalimantan and has been operational since 1991.6 million MT. developed a deepwater coal terminal located at Balikpapan. Bukit Baiduri and Fajar Bumi Sakti.000 DWT vessels. Tanito Harum. ** Terminal Batubara Indah (TBI) in Cirebon. TBI handles mostly coal requirements of the Cibinong cement plant and other nearby industries. Arutmin and other coal mines in Kalimantan. and receives regular deliveries from Adaro. Dermaga Prakasa Pratama (DPP).of more than 75 million MT/year. * Stacker reclaimer to handle coal in stockpile. To anticipate the increase of coal production in Kalimantan. ** Tanjung Bara Coal Terminal (TBCT).000 DWT. including Bengalon by KPC. * Belt conveyor as transport equipment from the mines.000 MT and is capable receiving 80. The facility provides services to coal mining companies operating along the Mahakam River. * Shovel and trucks to support mining operation. which commenced operation in 1997. has a stockpile capacity of 50. East.
the percentage rose to 60%. The benefit is that it will need no large investment and large number of workers. Role of coal mining contractors The number of coal mining contractors. has increased with the growing demand for their services. After the 1998 monetary crisis growing coal mining companies have to relay on contractors to do the mining as they would not want to risk investing in heavy equipment and employ many workers needed in the operation. The disadvantage is that it will need large number of workers that will need more accommodations and facilities. In addition it will need to have or rent sufficient sets of equipment. Coal mining operation There are various mining methods: First method: The mining company handles its self every phase of the job using equipment and its workers. In 2002. The job of removing the outer layer of the ground is handed over to a contractor. digging and reclamation (land fill). The disadvantage is that the company will continue to rely on other companies for mining technology and completion of work that the risk is greater of failure in finishing the job as scheduled. The two methods are often combined by large coal mining companies like PT Bukit Asam. therefore. which operates large deposits in the area of Air Laya in which mining is handled itself by PT BA by using bucket wheel and conveyor belts to carry coal from the mines to piling place. Second method: A company names a sub-contractor to handle certain phases of jobs such as removal of outer layers in open pit mining. The benefit is the continuity of production is better guaranteed. There are 150 mining service companies registered at the energy and . It also does not need to buy or lease all sets of equipment needed in the operation. around 40% of mining companies relied on contractors to the job of coal mining and in 2004. Small and medium companies almost entirely rely on contractors to do almost all phases of the jobs as they could not afford to buy expensive heavy equipment.In open pit mining the main types of equipment are shovels and trucks. production cost could be reduced such as through greater efficiency by using bucket wheel and conveyor belt.
Among large contractors dominating the job of mining coal are PT Pama Persada. Its other jobs were to move oil stockpile. a heavy equipment assembling company and agent for Komatsu heavy equipment and Nissan dump trucks. PT Petrosea. 1999 to August 2002. pipeline project in Binolirik. PT Thiess Contractors. Thiess Indonesia has carried out a number of projects valued at US$ 1.mineral resources ministry. PT Thiess Contractors Indonesia Thiess started operation in Indonesia in 1972.5 million tons of coal and removed overburden. Sumatra and power plant in Balikpapan. In 1998 it restarted operation in the country through PT. in East Kalimantan. PT Pama is a coal mining contractor starting operation in 1993 producing almost 5 million tons of coal a year. oil and gas sector and infrastructure sector. PT Thiess Contractors Indonesia in Sangatta mined 5. rehabilitate mines and mine coal using Auger. Thiess sold its business unit in the country..3 billion in the country related to mining sector. In 1984. Mining with Auger gave additional coal production of 275.5 kilometers of coal transport road to be completed in January. Kaltim Prima Coal. Its main client is PT Adaro. its production totaled 28 million tons up 17% from 2001. in South Kalimantan and for PT Jembayan Muarabara. and PT Kideco Jaya Agung. and since then it has take part in the construction of a number of projects in the country including the Halim Perdana Kusuma airport of Jakarta. PT Pama Persada Nusantara as Market Leader This company is a subsidiary of PT United Tractors Tbk.000 tons for KPC. 2003. Its other regular clients include PT Indomico Mandiri--Banpu. From June. In 2005 its production totaled 35 million tons. PT Pama Persada had a 42% share of the market of coal mining contracts in 2004 and earned a total income of Rp 3. in East Kalimantan and for PT Tanjung Alam Jaya. Since then PT. Thiess Contractors Indonesia with the foreign investment facility. but only 20 of them actively operate in the service industry. Big projects the company has built include: Projects of PT. In 2005 its income shot up to Rp 6 trillion. the Simpang airport of Pekanbaru. PT Kaltim Prima Coal. PT Bukit Makmur and PT Darma Henwa. The contract . PT Multi Harapan Utama. In 2002. Its latest project is to mine coal for PT Arutmin Indonesia. PT Tambang Batu Bara Bukit Asam. PT Thiess Contractors Indonesia received a new contract to build 5. Early September 2002. Perusahaan.8 trillion that year. It handles the job of mining and removing the outer layer of ground in open pit mining.
Bukit Makmur is a subsidiary of the BUMA group.000 tons of coal in the Pelikan open pit mine. which is also a 50% owner of PT Armadian Tritunggal. Thiess has long business ties with PT. With the large fleet of Hino trucks Bukit Makmur became a coal mining contractor. In 1998 the income of PT BUMA was recorded at only US$ 5 million but in a few years later in 2005 its posted an income of US$ 279 million and he income is forecast to rise to US$ 390 million in the following years. 13 units of bull dozers. Since 1993. Projects of PT. the distance between mines to stockpile in crushing plant and the distance between the crushing plant and the sea port. rehabilitation of mining areas. Arutmin since PT. It has handled jobs valued at more than US$ 287 million. The income of the company in 2004/2005 was more than US$ 360 million. Before being a mining contractor. PT BUMA also a contractor for Adaro. In June. and the Salim Group. processing it and transported it to over a distance of 36 kilometers to the port site using trailers with a carrying capacity of 100 tons. Kideco Jaya Agung. Sets of equipment in the projects includes 360-ton and 240-ton excavators loading 32. Arutmin started operation in Indonesia in 1989. etc.5 million tons of coal for Kideco. in South Kalimantan. coal transport and loading to ships.included removing ground outer layer and overburden as well as mining of 230. 2002. Thiess reached an agreement under which Thiess took over the entire job of coal mining for PT. Lanna Harita. in East Kalimantan. Senakin mine produces 450. See the following table. Arutmin. coal mining.000 tons of washed coal a month. Projects of PT. Coal Mining Cost The coal mining costs are determined by stripping ratio. It guarantees coal quality. PT. Kideco. Thiess did all the jobs of mining operation including digging of overburden. PT Bukit Makmur was established in 1988 by Johan Lensa and family. PT BUMA PT Bukit Makmur Utama Mandiri (BUMA) is the main contractor for the coal mines of Berau Coal. which itself is the majority shareholder of Berau Coal. when Thiess was given the job of building infrastructure project to facilitate the mining operation. Arutmin in South Kalimantan including operation and repair of heavy equipment. PT Thiess Contractors Indonesia played an important role in the mining of coal for Kideco in East Kalimantan. Arutmin and PT. 150-ton and 100-ton haul trucks. PT Bumi Makmur operates in the building of oil palm plantations such as those of the Astra Group. Based on the data from DPMB the lowest price of coal at the mouth of mine with stripping . mining plan. It produced 2. It is also known to operate large fleet of Hino trucks..
coal procurement cost in Kalimantan was US$ 25/ton for coal with a calorific value of 5.900 kcal/kg. and shipping cost at port. the cost of coal procurement is estimated to rise 15%-25% to US$ 28--US$ 32/ton According to the International Energy Agency (IEA). with the soaring oil prices.5/ton * Loading/unloading cost US$ 3 /ton IEA said coal open pit mining cost in Kalimantan is the second lowest in the world after in Wyoming open pit mines in the United States.6% in 2025 --The role of coal is to be raised to 32. Based on a calculation by the Institute of Energy Economics of Japan in 2001. broken down as follows: * Cost of mining operation US$ 8--18 /ton (averaging US$ 10. royalty.4% in 2025 --Fulfilling fossil energy in the country by phasing out export. coal procurement cost on FOB from Kalimantan is around US$ 23-US$ 40 /ton or averaged US$ 26/ton.8% in 2025 --The role of renewable energy is to be raised to 4. However.ratio of 1 is US$ 6 per ton not including costs of reclamation. If he SR is higher the coal mining cost is higher. Government Policy in Energy Sector Until now oil and natural gas still the main sources of energy in Indonesia. which groups industrial countries.7% in 2025 * Utilization of brown coal * Coal Liquefaction * Briquette --The role of geothermal is to be raised to 3. the government announced a new energy policy in January.2% in 2025 --The role of natural gas is to be raised to 30. Now with the soaring oil prices.5/ton) * Capital cost US$ 7. 2006 to reduce dependence on oil as a source of energy as follows: --The role of oil is to be reduced to 26. .5 /ton * Transport cost US$ 7. which exports of most of its cheap sources of energy.
Meanwhile it is estimated that the country needs US$ 750 million in investment for explorations if it is to maintain its present level of production. and government regulation (PP) No. A number of other local and foreign mining companies also show the same inclination. regional administrations have the authority to operate natural resources in their respective areas and are responsible for the preservation of the environment in line with the law regulation. c. Taxation Policy PP No. 22 in 1999 on regional administration. has stopped explorations and started eyeing coal mines already in operation in Kalimantan. 25 in 2000.9 billion down to US$ 174 million in 2003. Decline in Investment Interest Ironically. investment in coal mining was valued at US$ 1. Now investment is mainly for exploitations and expansion of the existing mines. In 1998. b.See the following table. On the other hand the Law No. there has been no new investment in coal mining industry since 1998. for example. a number of regulations and policies were issued hampering efforts to develop the mining sector such as the Law No. The government has called on PT Kaltim Prima Coal. 144 in 2000 changed the status of coal from goods exempted from tax into one imposed with tax causing difference in interpretations between PKP2B companies and the government. The contribution of coal to the country's energy consumption is forecast to more than double in the next 20 years. Overlapping and Conflicting Regulations In 1999. PT BA. Legal and business certainty The implementation of the regional autonomy law in 2001 has brought about various problems concerning confusion in authority between the center and the regional administrations. 41 Year 1999 on forestry banning mining operation in protected forest areas. when the coal prices are climbing. Investment in coal mining has declined since 1998. Investors choose to acquired the existing mines rather than investing in explorations for new deposits starting with feasibility studies. The law has hampered development of 150 KP/KK/PKP2B projects in protected forest areas. There are a number of factors discouraging new investment in coal mining industry as follows: a. Autonomous regional areas have issued many coal KP licenses conflicting with the regulation issued by the central government. 11 in 1967 remains effective causing confusion to new investors as until now the new Law on Mining is not yet issued to accommodate the interest of the autonomous regions. PT Arutmin and four other coal mining . Based on the Law No.
e. Much of the province's illegal coal comes from the mine area PT Arutmin owns. is subject to illegal miners who use a fleet of 200 trucks and 16 excavators. All motor vehicles that are used in all types of road are classified as heavy equipment.2% annually--from 47 million tons in 1998 to 106 million tons in . d. Coal is used especially to fuel power plants. The first generation coal miners are also exempted from paying 5% coal export tax. expanded tax objects in motor vehicles. this represents a loss of output worth US$ 92 million at current prices.91 trillion. Illegal mining often is large scale. Investment Cost in new coal mines A coal mining venture in Central Kalimantan. which was introduced last year and therefore the government should also reimbursed the tax. but they also cause damage to the environment in area under the responsibility of licensed coal mining companies. Explorations have been made and the mine is ready for exploitation over a period of 10 years with an annual production of 2 million tons.. The Law No. Illegal miners account for as much as 4 million of the 22 million tonnes of coal mined in South Kalimantan annually.5% revenue share from the coal sales as a royalty payment. with mine 100 kilometers from the first piling terminal in the Barito river and 200 kilometers fromtransshipment place. Illegal Mining (PETI) Illegal mining has been rampant in the country. PT Arutmin has considered demanding the government to pay compensation for damage caused by the illegal miners. They mine coal in concession areas of coal mining companies causing big losses to the companies. Industry sources report an environment of intimidation and threats of violence. PT Arutmin. known as PKP2B. Demand for coal grows with the soaring prices of crude oil. The coal contractors argued that the so called first generation CoW. Around US$ 32 million are needed to develop the mine including US$ 25 million for investment and US$ 7 million for working capital. in South Kalimantan. 18 of 1997 on regional taxes and compensation. The illegal miners not only steal coal. Coal Trade More than 70% of Coal Production Exported Indonesia exports 70% of its coal output. The coal miners have refused to pay the royalties on the grounds that the ministry of finance must reimburse the VAT they paid since the issuance of the government regulation no. stipulates that they must be exempted from paying any other taxes. 34 in 2000 amending the Law No. They transport their output using a road and a jetty built across environmentally sensitive coastal marshlands. In the past 7 years the country's coal exports have increased 12. 144 in 2000. Regional Compensation and tax on heavy equipment. The government is entitled to a 13.companies to settle their unpaid coal royalties from 2001-2005 worth Rp 3.
PLN is to build coal-fired power plants with a total capacity of 10. Demand Aspects Coal requirement in Indonesia to rise Domestic consumption of coal averages only 40 million tons a year or 30% of the country's production. Suralaya coal-fired power plant is the bigest user of coal in Indonesia. South Korea Hong Kong. accounting for 63% of the domestic consumption. Domestic market Obligation With the rising prices of coal and the increase in demand consumers begin to fear . An additional supply of around 26 million tons of coal.2005. The largest consumer are coal fired power plants.2 million tons a year in 2010. and coal fired power plants to be built by Independent Power Producers (IPP). PT Indocement in Citeureup. Large producers such as Kaltim Prima Coal (KPC) generally exports most of their production.6 million tons of coal in 2005. Exports to Japan totaled 24 million tons in 2005. The government has launch a program to use more coal instead of oil to fuel power plants. followed by cement factories and pulp industry. The country will save up to 50% of fuel cost if oil is substituted with coal. Currently coal consumption for the country's cement industry is around 5. See the following table.6 million tons of its total production of 27. West Java. Coal accounts for only 35% of energy generated in the country as against oil energy of 41%.5 million tons n 2010. See the following table. is the bigest user. therefore.5 million tons and the consumption is forecast to rise to 7. and India. the country's coal consumption in 2010 is estimated to total 91. Including consumption for the new plants. Coal consumption in Indonesia is relatively small in comparison to its production.000 megawatts to be completed in 2010. The following table shows the domestic coal user in 2003-2004. The composition is expected to change in favor of coal in the coming years with the government's program toeconomize on oil.000 tons of coal a year of oil is to be substituted with coal for fuel. Coal is also expected to be used by growing number of other industries like textile industry and boilers. Other Asian countries are still building more coal fired power plants. Taiwan. Textile industry will need around 500. Exports to Japan is stable as it has not built new coal fired power plants in the past several years. followed by PT Cement Gresik in East Java. Indonesia exports coal mainly to Japan.9 million tons. The consumption could rise to 1. In cement industry. KPC exported 26. followed by Paiton Energy. will be needed.
the coal price fell with large stocks. under which they will export coal only when domestic consumption has been fulfilled. Argus (coal daily).. . Gas is exported on long term contracts with buyers abroad while consumers in the country are facing scarcity in supply.700 kcal /kg peaked in 2004 and early 2005 at US$ 53. The Association of Coal Mining (APBI). They are not required to give priority to domestic consumption. PT Arutmin sells 90% of its coal production on l contract and KPC sells 80% of its production on contract and Bukit Asam sells its entire production on long term contract to PLN. Under the working contract. Call for the ruling of DMO is stronger after PLN is charged with the task of building coal power plants with a total capacity of 10. etc. according to Barlow Jonker Spot Price.9 per ton late 2004 triggered by panic buying following the surge in oil prices. therefore. the export price on FOB averaged US$ 40. Spot market is estimated to reach up to 8 million tons a year. the state has only 13.47 per ton. Thermal coal dominates coal production in Indonesia suitable for coal fired power plants. The government is still studying the DMO formula to be adopted. Indonesia.of scarcity of supply in the future especially as coal producers tend to exports their production. the second largest exporter of coal in the world. Indonesian Coal Price Index Ironically.000 MW until 2010 Marketing Aspect Contract sales dominate coal trade Contract sales dominate coal trade. Toward the end of 2005.69 per ton. The problem faced by the country in the case of gas is feared to repeat itself in coal. Supply to spot market comes mainly from small producers or illegal miners. The prices of coal in Indonesia vary by types and calorific value. The country uses the price references of Barlow Jonker (Coalfax). has no own price reference. Early 2006. Only a small part of coal production is sold on spot market. APBI Executive Director Soedjoko Tirtosoekotjo saidDMO could reach 40% of the country's total production. Coal prices up again The price of coal of 6. The highest price was US$ 62.5% split of coal output produced by contractors. has proposed a formula requiring coal producers to observe domestic market obligation/DMO.
66 --US$ 48. The price index is published by PT Coalindo Energy.6 million tons in 2020. up from around 150 million tons at present. 2006.5 million tons for cement industry. Coalindo ICI-3 could become a reference for coal of low calorific value used by PLN. The benchmark prices are for three grades--Coalindo ICI-1 with a calorific value of 6. Projection of domestic requirement Earlier the government predicted that the country will need 58. Coal mining.5 million tons of coal in 2010. consumers. up to 95. If the oil prices are still higher than US$ 50 a barrel. coal is high in demand. but now with the oil prices soaring. the country has to produce up to 225 million tons of coal in 201.94 per ton of ICI-1. Prospects of coal as a source of energy for Indonesia The government in a blue print for energy management said that coal will account for 32. has been accused of causing extensive . Coalindo ICI-2 5800 kcal/kg and Coalindo ICI-3 500 kcal/kg. The coal requirement to feed power plants alone is expected to reach 100 million in 2010 not including around 7. Industrial Risks There was little interest in coal as fuel because of a number of factors.APBI and coal business players and Argus Media Limited then initiated the formulation of Index Harga Batubara Indonesia (Indonesian Coal Price Index/ICI) set by a panel of 23 agencies including producers. even the open pit mining in Indonesia. It causes much pollution than oil fuel and it is less efficient to use coal that oil. the country will need to invest US$ 750 million--US$ 1 billion in this area. and supporting industries. 2006 were around US$ 51.2 million tons for other industries such as textile industry. Officially the price of Coalindo ICI will be published in July. If the country is to maintain its annual exports of 125 million tons. which is owned by coal business players.7% of energy supply in the country in 2025. The requirement is expected to be much higher with the rising oil prices. It has suddenly become an important alternative source of energy. The prices of Indonesia coal as published in June. The government has said to use low rank coal to fuel power plants such as lignite of which the country has large reserves. Step toward realization of the target has been made with the construction of PLTUs to replace oil fired power plants.500 kcal/kg. coal will have good prospects as an alternative source of energy. and 1. In order to reach the goal.
Berau and PT BA. --International pressures necessitating additional cost to comply with the rule of preserving the environment. With oil much more expensive. ** Indonesia has comparative advantages over other coal producing countries as it is geographically closer to consumers and its coal mining cost is cheaper especially in the production of thermal coal to fuel power plants. --Oil price fluctuation that will determine the prices of coal in the world market. Kideco. the government has launched a policy to use more coal to fuel power plants by planning building more coal fired power plants with a total capacity of 20. ** Around 80% of the country's coal production is dominated by six large producers namely Borneo Lumbung Energi (which owns KPC and Arutmin). . ** Indonesia is the world's second largest exporter of coal after Australia. --Coal mining is a long term venture therefore. The program will certainly push up demand for coal in the country in the next three years.damage to the environment as it requires wide operation areas. ** Around 90% of the country's coal production comes from East Kalimantan and South Kalimantan. East Kalimantan. ** Domestic consumption of coal is relatively small. there are risks of changes in the government policy that could cause additional burden for the investors such as in taxes and overlapping concession licenses. The risks that have to be faced by coal mining companies include: --Failure in finding adequate coal reserve for commercial exploitation. and South Kalimantan. Banpu Group. ** Indonesia has potential reserves of coal found in various areas notably in South Sumatra.3% annually on the average from 77 million tons to 150 million tons. Adaro. --Too many levies both legal and illegal. up by 14. Conclusions and Recommendations Conclusions ** Coal becomes a cheap alternative source of energy after the soaring oil prices. ** Indonesia's coal production rose sharply in the 2000-2005 period.000 megawatts. and inconsistent and conflicting regional regulations hampering investment.
the country needs to increase production to 225 million tons in 2010. including coal terminals. until now there is little interest shown by new investors in coal mining because of various factors including the government policies not seen as favorable by investors. therefore. Recommendations ** The government program to make coal as the main source of energy in the country requires supports in the form of policies that will encourage investment in the coal mining sector by removing all bottlenecks such as inconsistent taxation policy. However. the country will need 100 million tons of coal up from 40 million tons in 2005. ** Coal mining ventures need large investment. ** Coal is non renewable natural resource. therefore banks have to be involved in drafting a policy. roads and railways linking mines and terminals. ** Coal depots to serve as stockpiling facility are also needed in places near consumers to better guarantee supply without consumers having to keep large stocks. In order to meet the requirement and export commitments. and coal mining is a long term venture causing potential damage to the environment. must have long term vision in exploiting the natural wealth and must not look for short term profit. ** Construction of adequate and better infrastructure will also contribute to increasing coal production such as transport facilities. ** The large export commitments necessitate exploitation of new deposits to meet domestic requirement. ** The government has to be more serious in securing coal supply in the country and at the same time protecting the interest of coal mining companies already have contract buyers abroad by formulating a fair domestic market obligation. ** Around US$ 1 billion are needed in investment to finance development of new mines to be able to produce 225 million tons needed in 2010. up from around 155 million tons at present. Until now most coal mining ventures have been financed by foreign banks . and overlapping in mining concessions and conflicting regulations and by taking firm measure to stop illegal mining.** It is estimated that in 2010. The government.
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