When I was a kid in the mid-1960s, we moved to a house that had a pile of coal in the cellar—lump coal, nice big chunks with a clean cleavage and little dust. Who knows how long it had been there, perhaps 20 or 30 years. The current heating system was a fuel-oil furnace, and all trace of the coal furnace was long gone. It seemed a shame to throw it away. So for a while, my family revisited the 1800s, days of King Coal, and burned coal at home.
We had to get a cast-iron coal grate for the fireplace, then we had to learn to kindle and burn coal correctly. As I recall, we started with paper and kindling to get a hot start, then put smaller coal chips on it that would ignite quickly. Then we would pile larger lumps on, taking care not to smother or overload the fire, until we had built up a good pile of evenly burning coal. That would minimize smoke. You had to arrange things so that blowing on the fire wasn't necessary—blowing on it just spread coal smoke through the house.
Once ignited, coal burns slowly with little flame and high heat, occasionally making gentle ticking sounds. Coal smoke is less aromatic than wood smoke and has a dirtier smell, like cigar smoke compared to a pipe mixture. But like tobacco, it was not unpleasant in small, dilute doses. High-quality anthracite makes almost no smoke at all.
A grate full of burning coal would easily go all night without any attention. We had glass doors on the fireplace to help modulate the draft, which allowed us to burn more slowly at a lower temperature and also greatly reduce the risk of carbon monoxide exposure. Looking around the Web, I can see that we didn't do anything badly wrong. The two main things to be sure of are having a sound chimney that can take the hotter fire and regular chimneysweeping. For my family, burning that old coal was just fun, but with good equipment and careful operation coal can be as good a heating solution as anything else.
Today very few Americans burn coal at home any more, just 143,000 homes in the 2000 census (one-third of them around the Pennsylvania anthracite country). But the industry carries on, and sites like the Anthracite Coal Forum are active and full of ready advice.
Back when everyone used coal, the smoke was surely terrible. The notorious London smog, which used to kill hundreds of people, was based on coal smoke. Even so, in Britain today, where coal launched the Industrial Revolution more than 200 years ago, there is still a constituency for solid fuel heating. Technology has made coal a friendlier home fuel.
Coal is still king in the third world and China. The smoke and pollution from primitive stoves is horrendous, causing death and illness among people who deserve better. Environmental entrepreneurs and inventors (like South Africa's John Davies) are applying their talents to meet the need for simple, reliable clean coal stoves.
PS: Because it burns, coal can also catch fire (this above-ground culm fire was memorialized on a 100-year-old postcard), and an underground coal fire can burn for as long as the coal holds out, killing the land above it with heat, smoke, sulfur gases and carbon dioxide. Coal fires in the United States have been burning for decades; others in China have burned for centuries. China's coal fires destroy over five times more coal than the nation mines, and coal fires in China alone add up to about 3 percent of the whole Earth's fossil-fuel CO2 load. New Scientist has a brief introduction to the problem with good links.
Saturday, November 7, 2009
Use of Biofuel for Powerplants
In order to accelerate the use of biofuel, the Minister of Energy and Mineral Resources have issued Ministerial Decree No. 32/2008 regarding the supply, use, and sale of Biofuel as an alternative form of energy. One example of this ministerial decree is the regulation on mandatory use of biofuel in the transportation, industry, commercial, and power sector until 2025, which is to be carried out in several phases. For powerplants, these phases include the use of biodiesel amounting to 20% and biofuel amounting to 10% towards the total needs of powerplants.
The Department of Energy and Mineral Resources through its Directorate General for Electricity and Energy Usage, in coordination with Neaue Maschinbeau Halberstadt GmBH (NMBH) have completed the converter installation needed for biofuel conversion of a 10 MW Diesel Power Plant powerplant in Riau. NMBH is a German private company which has carried out intensive research for conversion development and biofuel powerplant.
By adding a converter, a diesel fueled powerplant will be able to fueled by biofuel, which in this case is Crude Palm Oil (CPO). Using this technology, Crude Palm Oil which is in abundant in the local area will be able to be directly used as fuel. Use of this converter in a 10 MW powerplant will be the first in Asia.
The suceess of this program will help boost Indonesia’s effort in maximizing the use of biofuel, as more than 1.600 of PLN’s powerplant is still powered by diesel. There are several benefits to be taken from biofuel use, including efficient fuel costs, as the current price of CPO is half of that of diesel price. Biofuel will also potentially reduce air pollution because it is based on renewable energy.
The Department of Energy and Mineral Resources through its Directorate General for Electricity and Energy Usage, in coordination with Neaue Maschinbeau Halberstadt GmBH (NMBH) have completed the converter installation needed for biofuel conversion of a 10 MW Diesel Power Plant powerplant in Riau. NMBH is a German private company which has carried out intensive research for conversion development and biofuel powerplant.
By adding a converter, a diesel fueled powerplant will be able to fueled by biofuel, which in this case is Crude Palm Oil (CPO). Using this technology, Crude Palm Oil which is in abundant in the local area will be able to be directly used as fuel. Use of this converter in a 10 MW powerplant will be the first in Asia.
The suceess of this program will help boost Indonesia’s effort in maximizing the use of biofuel, as more than 1.600 of PLN’s powerplant is still powered by diesel. There are several benefits to be taken from biofuel use, including efficient fuel costs, as the current price of CPO is half of that of diesel price. Biofuel will also potentially reduce air pollution because it is based on renewable energy.
Sunday, October 25, 2009
Coal Demand On The Rise, Govt’ Sets Obligation To Fulfil Domestic Market
The domestic demand of coal is estimated to soar from 62.5 million tons in 2007 to 70.75 million tons in 2008. Consequently, the Government has ruled that a Domestic Market Obligation (DMO) be applied to the industry.
The above was stated in a press release from the Ministry of Energy and Mineral Resources (ESDM) received by this magazine, 27 June 2008. The statement says that the move is in accordance with the stipulations of articles 12 and 13 of the working contract for coal mining, or PKP2B in its Indonesian acronym.
According to the working contract, if the Government falls short to obey the domestic requirement due to a huge increase in the coal demand, contractors are obliged to conform parts or all of their trades to support the domestic needs, based on stipulations and provisions that have been agreed upon, on a condition that it could be so performed without hindering their previous obligations.
The DMO will be applied based on the queries from industry, transportation and electricity sectors. Apart of attempting the move, the Government is also considering to adjust its share of 13.5 percent of the total coal production by the contractors.
The above was stated in a press release from the Ministry of Energy and Mineral Resources (ESDM) received by this magazine, 27 June 2008. The statement says that the move is in accordance with the stipulations of articles 12 and 13 of the working contract for coal mining, or PKP2B in its Indonesian acronym.
According to the working contract, if the Government falls short to obey the domestic requirement due to a huge increase in the coal demand, contractors are obliged to conform parts or all of their trades to support the domestic needs, based on stipulations and provisions that have been agreed upon, on a condition that it could be so performed without hindering their previous obligations.
The DMO will be applied based on the queries from industry, transportation and electricity sectors. Apart of attempting the move, the Government is also considering to adjust its share of 13.5 percent of the total coal production by the contractors.
The 10.000 MW Power Plant Under Threat Without DMO Of Coal
The success of a 10.000 MW power plant will be a pawn in a gambling by the SBY-JK government. Up to now, there are no barriers in the investment and space availability. The biggest threat comes from the uncertain supply of coal, since a bigger amount of the energy source is still dedicated for export market.
Sapto Triono Widiastoto, the Secretary of the Committee for the Acceleration of Electricity Development, The State Electricity Company (PLN), said that the project is schemed to reduce the dependency on oil as energy source. When the project was instigated in 2006, the government were relying on the abundance of low-grade coal. Nowadays, even the low-ranked coal are almost nowhere to find since they were already exported. That include those from companies who were at the outset had committed to supply the government with low-grade coal.
Even when the government had threatened the companies to pay a penalty for their inconstant supply of coal, the benefit earned from selling the commodity abroad is apparently still much bigger, that they would willingly pay the mere penalty. This, according to Sapto, could be hindered only through a Domestic Market Obligation (DMO) scheme of coal.
He further mentioned that the current national requirement for coal is about 40 million tons per year. The 35 million tons would be used for the generation of the 10.000 MW power plant, which owes 80% of the total energy sources to coal. For this year only, the government had committed to purchase high-rank coal at the market price of US$ 140.00 per ton. Sapto explained that his side would really hope that the government could implement the DMO scheme as soon as possible.
It is revealed that the government had planned that scheme be implemented as early as next month (September 2008), and that the Indonesian Coal Mining Association (APBI) has showed its support to the government’s plan.
Sapto Triono Widiastoto, the Secretary of the Committee for the Acceleration of Electricity Development, The State Electricity Company (PLN), said that the project is schemed to reduce the dependency on oil as energy source. When the project was instigated in 2006, the government were relying on the abundance of low-grade coal. Nowadays, even the low-ranked coal are almost nowhere to find since they were already exported. That include those from companies who were at the outset had committed to supply the government with low-grade coal.
Even when the government had threatened the companies to pay a penalty for their inconstant supply of coal, the benefit earned from selling the commodity abroad is apparently still much bigger, that they would willingly pay the mere penalty. This, according to Sapto, could be hindered only through a Domestic Market Obligation (DMO) scheme of coal.
He further mentioned that the current national requirement for coal is about 40 million tons per year. The 35 million tons would be used for the generation of the 10.000 MW power plant, which owes 80% of the total energy sources to coal. For this year only, the government had committed to purchase high-rank coal at the market price of US$ 140.00 per ton. Sapto explained that his side would really hope that the government could implement the DMO scheme as soon as possible.
It is revealed that the government had planned that scheme be implemented as early as next month (September 2008), and that the Indonesian Coal Mining Association (APBI) has showed its support to the government’s plan.
Envisioning Energy At A Mine-mouth
There is still a huge gap between the fulfillment and the expectation of domestic energy needs. The cause is thought to be that of energy sources located away from mining areas. Development of mine-mouth power plants has increasingly become a possible solution.
The Governor of Central Kalimantan, A. Teras Narang, was enthusiastic when he presented his ideas during a seminar in Jakarta on Saturday, 13 September 2008. He was accompanied in the seminar by Wahyudin Sitompul, an official at the local State Electricity Company (PLN in its Indonesian abbreviation). The two gentlemen were in a same mission; they came up to the country’s capital to unleash a mega-project on the interconnection for Java - Kalimantan power transfer.
Both confessed to a satisfaction over their presentations in front of the country’s high-level officials. To this end, Mr. Narang along with three other provincial leaders in Kalimantan had splashed a large amount of cash to organize the seminar. Hundreds of participants, most of them of regional bureaucrats, swarmed the Sultan hotel at the center of the country’s capital to be in attendance in the seminar’s discussions.
Mr. Narang took the chance to offer his vision as a regional leader in a speech during the seminar. He mentioned that the abundance of low calorie coal should primarily be devoted to the country’s energy requirements, instead of to the international market. He also pleaded that all stakeholders keep in mind that coal is a non-renewable energy resource. Its ultimate use should fully be aimed to support the country’s development programs.
In an interview with Majalah TAMBANG, Mr. Narang said that the development of mine-mouth power plants is highly viable. He based his statement on a local PLN’s finding which reveals that a per KwH energy would be very much cheaper if a power plants are built next to the coalmines. He laid out the fact that while unrelentingly complaining on providing too high a subsidy to stabilize the national energy price, the central government has been giving too little attention to energy at the mine-mouth proposals.
“Just develop as much mine-mouth power plants as possible. However big the demand from Java is, (they would be prepared) to provide,” he said. He challenged the central PLN’s lasting argument that an energy transmission line to Java is more expensive than inter-islands coal shipping costs. He readily offered a more likely calculation, backed with the unreliable weather situation at the Java sea recently that has proven to be the hindrance to smooth inter-island shippings.
He added that with the most recent technology advances, the energy supply from mine-mouth power plants is very much on the cards. There now remains only the classic issue of whether the government would be willing to consider the new option or to keep the inefficient, extravagant- ongoing practices.
“Central Kalimantan is ready for mine-mouth power plants,” Mr. Narang said in the seminar. To the participants, he explained that there are several spots throughout the province to be chosen as potential energy suppliers for Java island. The province’s Kota Waringin and Kapuas regencies, for instance, are only 310 and 315 kilometres away to Semarang, Central Java and Surabaya, East Java, respectively. This would mean in the perspective of a distance, an interconnection for Java-Kalimantan power transfer is indeed workable.
It is estimated that a Kalimantan - Java mine-mouth power plant interconnection would require a mere 2.3 billion rupiahs, with a break-even point already predicted right after the initial year.
As a conclusion to his speech, Mr. Narang invited all stakeholders to contemplate on the nation’s long-term strategic interests, of 10 to 20 years ahead. “Central Kalimantan is ready to seriously strive for our great nation’s gain. It’s now down to the central (government) to show the same determination,” said the Governor.
The Oddity in the 10.000 MW Energy Project
Meanwhile, a harsh viewpoint was expressed by former South Sumatera Governor, Syahrial Oesman. He pointed to the country’s power policy inconsistency. “South Sumatra was once appointed as the nation’s energy powerhouse. However, the 10.000 MW energy project is to be kicked off in Java,” he said in front of participants at the Association of Indonesian Mining Professionals (PERHAPI) annual gathering in the Horison Hotel in Palembang, South Sumatera on Friday, 25 July 2008.
He mentioned that there is an oddity in the project set off by the VP Jusuf Kalla. Elsewhere in the world, power plants are built at energy sources’ vicinity rather than of the users. South Sumatera is geared-up for a 7,000 MW electricity supply in the initial Sumatera - Java interconnection. Moreover, the province is blessed with the abundance of low-calorie coal, the power plant’s main element, beside of ore and sulphur reserves.
Mine-mouth power plants at the province are already planned the regencies of Banjar Sari (2 x 100 MW), Banko Tengah (4 x 600 MW), Adimas Baturaja Cemerlang (2 x 100 MW), MUBA (2 x 100 MW), MURA (2 x 100 MW), Musi Prima Coal (2 x 100 MW), Sungai Malam (2 x 600 MW and 3 x 100 MW), Muara Enim (4 x 100 MW), Gunung Megang (2 x 100 MW), and Lahat (4 x 600 MW).
“The permit (to commence the development) was never given,” said Mr. Oesman, who stated that all proceedings were already initiated as early as 2005. “All of a sudden, then came the policy to develop (the project) in Java,” revealed the gentleman who lost his incumbency as the province’s Governor last month.
Mr. Oesman asserted that the 10.000 MW project would be much cheaper if developed in South Sumatra. “Coal delivery expenses from Kalimantan to Java in two years time would be enough to develop a Sumatra - Java transmission line,” he said before put out the estimated cost in the region of 1.5 billion rupiahs.
He also stated that in a year the Java sea would only be navigable for a maximum three-month. Earlier this year, operations at Tanjung Jati B power plant at Cilacap, Central Java were halted due to delayed coal delivery thanks to hostile seawater.
The Pursuit of a Grand Scenario
Similar to Mr. Oesman, Jeffrey Mulyono, Chairman of the Indonesian Coal Mining Association (APBI in its Indonesian abbreviation) were downbeat when confessing that on several occasions, he sneered at the PLN for constantly putting sub-standard bargains on the electricity price in previous Java - Sumatera interconnection negotiations. He felt sorry that until now an inter-island transmission line in the country is still lacking.
“To me, it is as if the PLN prefers to continuously burn out diesel fuel,” he said in an interview with Majalah TAMBANG on 18 September 2008, in reference to the state electricity company’s reluctance to immediately consider the option. “If mine-mouth power plant is already at hand now, we can develop (the transmission line) anytime,” added Mr. Mulyono, who also stated that obstacles to the development should not end all initiatives.
He envisioned that the development of mine-mouth power plants in Kalimantan island should be integrated in an industrial areas development scheme. A grand scenario of mine-mouth power plants development, followed by the launching of nearby industrial areas would enhance economy and business growth in the region. This would create a vast job opportunity for the country’s workforce. A train line expansion in the island would also call for a huge need of electricity apart of the demand from the surrounding areas.
Mr. Mulyono praised some mining companies who already instigated their mine-mouth power plants development, such as of PT Adaro Indonesia and Indominco, as well as of Gorontalo and PT Berau Coal, whose small-scale mine-mouth power plants are designed for their own electricity demands. “I’d like to reiterate that mine-mouth power plant is really positive,” added Mr. Mulyono, “If the utilization is broadened, the multipying effect would be overwhelming”.
The Misfortune at Energy Powerhouses
The demand for mine-mouth power plants has increasingly become apparent. Syahrial Oesman is not the only regional leader whose inquiry for energy sources at mine-mouth was rejected by the central government.
As revealed in this magazine’s March 2008 edition, South Kalimantan Governor Rudy Arifin sent a letter to the Minister of Energy and Mineral Resources (ESDM in its Indonesian abbreviation), with copies to the President, the Vice President and the Chairman of the parliament’s Seventh Commission.
The February 2008 letter slammed the then energy crisis at South and Central Kalimantan provinces, which came along after a curtail policy was imposed on the region’s coal. Electricity for residential and industrial purposes was unsteady at best, threatening the regions’ conducive climate for investment. This happened amid both provinces’ claim as the country’s top coal producers.
Of the operational plants in the region, the provinces’ had to do with only 260 MW electricity. Coal producers there preferred to offload their products to markets outside the region which offered a more promising selling price. “We will produce a law to regulate the region’s big mining companies to build power plants in our vicinity as part of their CSR” wrote Mr. Arifin in the letter. The mining giants would then be required to sell their electricity to the local PLN with a cut-off price, hence residents and industries alike could get a steady supply of electricity at a cheap price. The move was proven effective as several big names readily committed themselves to the power plants development.
During a seminar on coal exploitation in Jakarta on 13 September 2008, the Executive Director of APBI, Supriatna Suhala stated that mine-mouth power plants should be seen as a prioritized matter. He said that Kalimantan as the country’s energy powerhouse should be developed not only into primary energy provider area, but also into secondary energy provider area which could acquire a steady, cheap electricity.
This is based on Kalimantan’s coal reserve, accounted at 53 percent of the total national reserve. The island contributed a total of 91 percent of the national coal production in 2007, 52.3 percent of which was obtained from East Kalimantan and 35.7 percent from South Kalimantan. “Investment climate there should be more competitive than other regions, among other through the supply of cheap electricity,” said Mr. Suhala.
M.S. Marpaung, Director of Technique and Environment at the ESDM Ministry astoundingly provided some figures which show that coal from four provinces in Kalimantan had supported a steady electricity supply for at least a fifth of the world’s territory. Millions of tons of coal were shipped to world’s regions as far as China, India, Malaysia, Hongkong, Japan and Korea. All the while, the island’s residents should consent for a very inadequate electricity supply.
“It is wrong if we do not concentrate on (the development of) new power plants in Kalimantan,” said Mr. Marpaung to our reporters, early September. He further said that the current injustice should be put to an end, once and for all. Kalimantan should be made into a coal powerhouse, not only to fulfil the current needs of steady electricity supply, but also for the needs of the nation’s generations to come, he was further quoted as saying.
The Governor of Central Kalimantan, A. Teras Narang, was enthusiastic when he presented his ideas during a seminar in Jakarta on Saturday, 13 September 2008. He was accompanied in the seminar by Wahyudin Sitompul, an official at the local State Electricity Company (PLN in its Indonesian abbreviation). The two gentlemen were in a same mission; they came up to the country’s capital to unleash a mega-project on the interconnection for Java - Kalimantan power transfer.
Both confessed to a satisfaction over their presentations in front of the country’s high-level officials. To this end, Mr. Narang along with three other provincial leaders in Kalimantan had splashed a large amount of cash to organize the seminar. Hundreds of participants, most of them of regional bureaucrats, swarmed the Sultan hotel at the center of the country’s capital to be in attendance in the seminar’s discussions.
Mr. Narang took the chance to offer his vision as a regional leader in a speech during the seminar. He mentioned that the abundance of low calorie coal should primarily be devoted to the country’s energy requirements, instead of to the international market. He also pleaded that all stakeholders keep in mind that coal is a non-renewable energy resource. Its ultimate use should fully be aimed to support the country’s development programs.
In an interview with Majalah TAMBANG, Mr. Narang said that the development of mine-mouth power plants is highly viable. He based his statement on a local PLN’s finding which reveals that a per KwH energy would be very much cheaper if a power plants are built next to the coalmines. He laid out the fact that while unrelentingly complaining on providing too high a subsidy to stabilize the national energy price, the central government has been giving too little attention to energy at the mine-mouth proposals.
“Just develop as much mine-mouth power plants as possible. However big the demand from Java is, (they would be prepared) to provide,” he said. He challenged the central PLN’s lasting argument that an energy transmission line to Java is more expensive than inter-islands coal shipping costs. He readily offered a more likely calculation, backed with the unreliable weather situation at the Java sea recently that has proven to be the hindrance to smooth inter-island shippings.
He added that with the most recent technology advances, the energy supply from mine-mouth power plants is very much on the cards. There now remains only the classic issue of whether the government would be willing to consider the new option or to keep the inefficient, extravagant- ongoing practices.
“Central Kalimantan is ready for mine-mouth power plants,” Mr. Narang said in the seminar. To the participants, he explained that there are several spots throughout the province to be chosen as potential energy suppliers for Java island. The province’s Kota Waringin and Kapuas regencies, for instance, are only 310 and 315 kilometres away to Semarang, Central Java and Surabaya, East Java, respectively. This would mean in the perspective of a distance, an interconnection for Java-Kalimantan power transfer is indeed workable.
It is estimated that a Kalimantan - Java mine-mouth power plant interconnection would require a mere 2.3 billion rupiahs, with a break-even point already predicted right after the initial year.
As a conclusion to his speech, Mr. Narang invited all stakeholders to contemplate on the nation’s long-term strategic interests, of 10 to 20 years ahead. “Central Kalimantan is ready to seriously strive for our great nation’s gain. It’s now down to the central (government) to show the same determination,” said the Governor.
The Oddity in the 10.000 MW Energy Project
Meanwhile, a harsh viewpoint was expressed by former South Sumatera Governor, Syahrial Oesman. He pointed to the country’s power policy inconsistency. “South Sumatra was once appointed as the nation’s energy powerhouse. However, the 10.000 MW energy project is to be kicked off in Java,” he said in front of participants at the Association of Indonesian Mining Professionals (PERHAPI) annual gathering in the Horison Hotel in Palembang, South Sumatera on Friday, 25 July 2008.
He mentioned that there is an oddity in the project set off by the VP Jusuf Kalla. Elsewhere in the world, power plants are built at energy sources’ vicinity rather than of the users. South Sumatera is geared-up for a 7,000 MW electricity supply in the initial Sumatera - Java interconnection. Moreover, the province is blessed with the abundance of low-calorie coal, the power plant’s main element, beside of ore and sulphur reserves.
Mine-mouth power plants at the province are already planned the regencies of Banjar Sari (2 x 100 MW), Banko Tengah (4 x 600 MW), Adimas Baturaja Cemerlang (2 x 100 MW), MUBA (2 x 100 MW), MURA (2 x 100 MW), Musi Prima Coal (2 x 100 MW), Sungai Malam (2 x 600 MW and 3 x 100 MW), Muara Enim (4 x 100 MW), Gunung Megang (2 x 100 MW), and Lahat (4 x 600 MW).
“The permit (to commence the development) was never given,” said Mr. Oesman, who stated that all proceedings were already initiated as early as 2005. “All of a sudden, then came the policy to develop (the project) in Java,” revealed the gentleman who lost his incumbency as the province’s Governor last month.
Mr. Oesman asserted that the 10.000 MW project would be much cheaper if developed in South Sumatra. “Coal delivery expenses from Kalimantan to Java in two years time would be enough to develop a Sumatra - Java transmission line,” he said before put out the estimated cost in the region of 1.5 billion rupiahs.
He also stated that in a year the Java sea would only be navigable for a maximum three-month. Earlier this year, operations at Tanjung Jati B power plant at Cilacap, Central Java were halted due to delayed coal delivery thanks to hostile seawater.
The Pursuit of a Grand Scenario
Similar to Mr. Oesman, Jeffrey Mulyono, Chairman of the Indonesian Coal Mining Association (APBI in its Indonesian abbreviation) were downbeat when confessing that on several occasions, he sneered at the PLN for constantly putting sub-standard bargains on the electricity price in previous Java - Sumatera interconnection negotiations. He felt sorry that until now an inter-island transmission line in the country is still lacking.
“To me, it is as if the PLN prefers to continuously burn out diesel fuel,” he said in an interview with Majalah TAMBANG on 18 September 2008, in reference to the state electricity company’s reluctance to immediately consider the option. “If mine-mouth power plant is already at hand now, we can develop (the transmission line) anytime,” added Mr. Mulyono, who also stated that obstacles to the development should not end all initiatives.
He envisioned that the development of mine-mouth power plants in Kalimantan island should be integrated in an industrial areas development scheme. A grand scenario of mine-mouth power plants development, followed by the launching of nearby industrial areas would enhance economy and business growth in the region. This would create a vast job opportunity for the country’s workforce. A train line expansion in the island would also call for a huge need of electricity apart of the demand from the surrounding areas.
Mr. Mulyono praised some mining companies who already instigated their mine-mouth power plants development, such as of PT Adaro Indonesia and Indominco, as well as of Gorontalo and PT Berau Coal, whose small-scale mine-mouth power plants are designed for their own electricity demands. “I’d like to reiterate that mine-mouth power plant is really positive,” added Mr. Mulyono, “If the utilization is broadened, the multipying effect would be overwhelming”.
The Misfortune at Energy Powerhouses
The demand for mine-mouth power plants has increasingly become apparent. Syahrial Oesman is not the only regional leader whose inquiry for energy sources at mine-mouth was rejected by the central government.
As revealed in this magazine’s March 2008 edition, South Kalimantan Governor Rudy Arifin sent a letter to the Minister of Energy and Mineral Resources (ESDM in its Indonesian abbreviation), with copies to the President, the Vice President and the Chairman of the parliament’s Seventh Commission.
The February 2008 letter slammed the then energy crisis at South and Central Kalimantan provinces, which came along after a curtail policy was imposed on the region’s coal. Electricity for residential and industrial purposes was unsteady at best, threatening the regions’ conducive climate for investment. This happened amid both provinces’ claim as the country’s top coal producers.
Of the operational plants in the region, the provinces’ had to do with only 260 MW electricity. Coal producers there preferred to offload their products to markets outside the region which offered a more promising selling price. “We will produce a law to regulate the region’s big mining companies to build power plants in our vicinity as part of their CSR” wrote Mr. Arifin in the letter. The mining giants would then be required to sell their electricity to the local PLN with a cut-off price, hence residents and industries alike could get a steady supply of electricity at a cheap price. The move was proven effective as several big names readily committed themselves to the power plants development.
During a seminar on coal exploitation in Jakarta on 13 September 2008, the Executive Director of APBI, Supriatna Suhala stated that mine-mouth power plants should be seen as a prioritized matter. He said that Kalimantan as the country’s energy powerhouse should be developed not only into primary energy provider area, but also into secondary energy provider area which could acquire a steady, cheap electricity.
This is based on Kalimantan’s coal reserve, accounted at 53 percent of the total national reserve. The island contributed a total of 91 percent of the national coal production in 2007, 52.3 percent of which was obtained from East Kalimantan and 35.7 percent from South Kalimantan. “Investment climate there should be more competitive than other regions, among other through the supply of cheap electricity,” said Mr. Suhala.
M.S. Marpaung, Director of Technique and Environment at the ESDM Ministry astoundingly provided some figures which show that coal from four provinces in Kalimantan had supported a steady electricity supply for at least a fifth of the world’s territory. Millions of tons of coal were shipped to world’s regions as far as China, India, Malaysia, Hongkong, Japan and Korea. All the while, the island’s residents should consent for a very inadequate electricity supply.
“It is wrong if we do not concentrate on (the development of) new power plants in Kalimantan,” said Mr. Marpaung to our reporters, early September. He further said that the current injustice should be put to an end, once and for all. Kalimantan should be made into a coal powerhouse, not only to fulfil the current needs of steady electricity supply, but also for the needs of the nation’s generations to come, he was further quoted as saying.
Mining Sector Far From Collapsing
The mining sector is believed to be able to successfully ride out the current economy crisis. The crisis could eventually be conditioned to bring further opportunities. Only professional mining would endure the hardships.
“The mining sector, of coal in particular, is far from collapsing. We even foresee lots of opportunities here,” said Jeffrey Mulyono optimistically. The gentleman who is the chairman of Indonesian Coal Mining Association (APBI in its Indonesian abbreviation) was among the speakers in an international seminar on the impacts of the global crisis to the national mining industry, organized by Majalah TAMBANG in Jakarta on 3 December 2008.
Investment in the coal mining sector is at present most prospective. In his opinion, only mining companies who run their business professionally would succeed in creating and catching the opportunities. He also warned, however, that companies should spend more wisely in the current unpredictable condition.
The current crisis, according to Mr. Mulyono, would be a natural selection for illegal miners alike. Prices of commodities would be easily exposed to corrections, therefore illegal mining practitioners would not survive and they would automatically be perished. He then raised the issues of strengthening the sector’s human resources and promoting of locally made products.
Another optimistic view was voiced out by Krishna Syarif, Financial Director of PT. Timah, Tbk., the world’s second largest tin producer after China’s Yunan Tin. He explained that even in the current economic situation, PT. Timah had secured its profit significantly. With the current international price at US$ 11,500 per ton, his company could roll its business healthily. “At the current exchange rate to the US dollar, our production costs are close to our expectation,” said the young executive, sharing his inspiring story to the seminar’s audience.
Mr. Syarif also noted that companies should always pay attention to consolidation efforts with national and local governments, as well as other stakeholders, in order to maintain a good control on production and export. He also raised up the issues of good mining practice to ensure effectivity and efficiency in the mining activities, as well as of efforts to eradicate illegal mining conducts.
He reminded the audience that the crisis will eventually come to an end. “Tin is a very prospective commodity, as it is much needed by strategic industries such as the electronic industry. I am sure of an improved global price of this commodity in the future,” said Mr. Syarif further, concluding his speech.
Another speaker of the seminar, Rudy Merukh of Merukh Enterprise, was also in an extra optimistic mood when explaining that the mining sector is fundamentally strong. He said that the sector would easily be able to ride out the current crisis.
The man who is also a director at PT Newmont Nusa Tenggara then shared his company’s success story, starting with its 35 years experience weathering the ups and downs in the mining business. In 1982, when gold’s price at the global market fell down, his company, currently owner of up to 500 mining concessions all over the country, included the trading of gold as a future commodity in futures markets in the UK and Australia.
Mr. Merukh stated that there is more to do than only concentrating on financing to overcome the impacts of the crisis. Other aspects to be put into consideration are cost, marketing and sales. For instance, added value should be boosted in terms of marketing.
“The mining sector, of coal in particular, is far from collapsing. We even foresee lots of opportunities here,” said Jeffrey Mulyono optimistically. The gentleman who is the chairman of Indonesian Coal Mining Association (APBI in its Indonesian abbreviation) was among the speakers in an international seminar on the impacts of the global crisis to the national mining industry, organized by Majalah TAMBANG in Jakarta on 3 December 2008.
Investment in the coal mining sector is at present most prospective. In his opinion, only mining companies who run their business professionally would succeed in creating and catching the opportunities. He also warned, however, that companies should spend more wisely in the current unpredictable condition.
The current crisis, according to Mr. Mulyono, would be a natural selection for illegal miners alike. Prices of commodities would be easily exposed to corrections, therefore illegal mining practitioners would not survive and they would automatically be perished. He then raised the issues of strengthening the sector’s human resources and promoting of locally made products.
Another optimistic view was voiced out by Krishna Syarif, Financial Director of PT. Timah, Tbk., the world’s second largest tin producer after China’s Yunan Tin. He explained that even in the current economic situation, PT. Timah had secured its profit significantly. With the current international price at US$ 11,500 per ton, his company could roll its business healthily. “At the current exchange rate to the US dollar, our production costs are close to our expectation,” said the young executive, sharing his inspiring story to the seminar’s audience.
Mr. Syarif also noted that companies should always pay attention to consolidation efforts with national and local governments, as well as other stakeholders, in order to maintain a good control on production and export. He also raised up the issues of good mining practice to ensure effectivity and efficiency in the mining activities, as well as of efforts to eradicate illegal mining conducts.
He reminded the audience that the crisis will eventually come to an end. “Tin is a very prospective commodity, as it is much needed by strategic industries such as the electronic industry. I am sure of an improved global price of this commodity in the future,” said Mr. Syarif further, concluding his speech.
Another speaker of the seminar, Rudy Merukh of Merukh Enterprise, was also in an extra optimistic mood when explaining that the mining sector is fundamentally strong. He said that the sector would easily be able to ride out the current crisis.
The man who is also a director at PT Newmont Nusa Tenggara then shared his company’s success story, starting with its 35 years experience weathering the ups and downs in the mining business. In 1982, when gold’s price at the global market fell down, his company, currently owner of up to 500 mining concessions all over the country, included the trading of gold as a future commodity in futures markets in the UK and Australia.
Mr. Merukh stated that there is more to do than only concentrating on financing to overcome the impacts of the crisis. Other aspects to be put into consideration are cost, marketing and sales. For instance, added value should be boosted in terms of marketing.
Beware Of Mining Commodities Certificate Forgery!
The Ministry of Trade had issued a warning to mining stakeholders on the forgery of quality certificate of mining commodities. The offense is usually committed by fraudulent traders when presenting offers to potential buyers. It often occurs in export-import trading. As a result, buyers frequently receive goods that fail to match the quality declared in the document. This will consequently tarnish the image of the Indonesian mining as a whole.
The above was exclusively revealed to Majalah TAMBANG by the Director of Export of Industry and Mining Product, Directorate General of International Trade, H. Agus Tjahjono, in Jakarta early January 2009. Mr. Tjahjono’s office only recently had dealt with several cases of export quality certificate forgeries.
The offense was committed particularly by irresponsible traders. In most cases, potential buyers will ask the traders for information on goods and commodities. The traders will initially show a forged certificate. When the buyers are already convinced and therefore placing an order, the quality and the quantity of the delivered goods will not be the same as they are stated in the certificate. The certificates in question are no doubt faked, as their numbers are not registered at the Ministry.
Such is a common practice, especially for mining products. This is mainly due to the fact that traders could get the goods from so many sources. They would forge the certificate in expectation of a quick deal. For an example, there was a case of a delivery which stated as consisting of 6,100 calories coal. What is delivered to the buyer, however, would be of much lower quality than that stated in the correlated certificate.
Mr. Tjahjono also said that in such a case, surveyors who issued the Surveyor’s Report (the so-called LS) are not to blame, since the LS is not a quality and quantity credential for exported goods. Issuing an LS is just among the procedures to open an Export Notification (the so-called PEB), which is issued only when the exported goods are about to be shipped. The quality and quantity of the said products will refer to the quality certificate.
Indeed, surveyors have a hand in issuing quality certificates of exported goods. However, it is these certificates that are forged by irresponsible traders for their advantage. Not only they do harm to buyers of Indonesian products, they also do to the image of Indonesian mining, Mr. Tjahjono was further quoted as saying.
The national police is currently pursuing offenders of certificate forgery. The Trade Ministry assumed that such practice is already around for some times in the Indonesian mining business. The case is seldom exposed since there are very few complaints lodged by afflicted buyers.
The above was exclusively revealed to Majalah TAMBANG by the Director of Export of Industry and Mining Product, Directorate General of International Trade, H. Agus Tjahjono, in Jakarta early January 2009. Mr. Tjahjono’s office only recently had dealt with several cases of export quality certificate forgeries.
The offense was committed particularly by irresponsible traders. In most cases, potential buyers will ask the traders for information on goods and commodities. The traders will initially show a forged certificate. When the buyers are already convinced and therefore placing an order, the quality and the quantity of the delivered goods will not be the same as they are stated in the certificate. The certificates in question are no doubt faked, as their numbers are not registered at the Ministry.
Such is a common practice, especially for mining products. This is mainly due to the fact that traders could get the goods from so many sources. They would forge the certificate in expectation of a quick deal. For an example, there was a case of a delivery which stated as consisting of 6,100 calories coal. What is delivered to the buyer, however, would be of much lower quality than that stated in the correlated certificate.
Mr. Tjahjono also said that in such a case, surveyors who issued the Surveyor’s Report (the so-called LS) are not to blame, since the LS is not a quality and quantity credential for exported goods. Issuing an LS is just among the procedures to open an Export Notification (the so-called PEB), which is issued only when the exported goods are about to be shipped. The quality and quantity of the said products will refer to the quality certificate.
Indeed, surveyors have a hand in issuing quality certificates of exported goods. However, it is these certificates that are forged by irresponsible traders for their advantage. Not only they do harm to buyers of Indonesian products, they also do to the image of Indonesian mining, Mr. Tjahjono was further quoted as saying.
The national police is currently pursuing offenders of certificate forgery. The Trade Ministry assumed that such practice is already around for some times in the Indonesian mining business. The case is seldom exposed since there are very few complaints lodged by afflicted buyers.
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