Tuesday, 21 June 2011

The Hard Struggle To Fullfill Local Need For Coal

There are obstacles in exercising one of the Directorate General of Mineral and Coal to fulfill domestic need of mineral and coal to unprospective local market. This was disclosed by the secretary of the Directorate General Mineral and Coal, the Ministry of Energy and Mineral Resources on the occasion of Investigative and Reporting Training to the press for Mining Reporters in Bogor.

“Yes, this is the obstacle. This is our homework, because we are having a weak market. I has to be explored. Most of our mineral products are directly exported.” Edi said and further remarked that this coal commodity were mostly exported due to low demand at home.

To jack up demand, the industry had to be developed to prevent imbalance the way it was now. For example, in case of copper, only 30 percent was used domestically, the remaining 70% were exported.

Other policies of DJMB were to ensure certainty and transparence in minery management (supporting regulations to the Minery Law, sanction for violations etc.), to step up supervision and upgrading. Furthermore to drive investment development and state revenues, and to promote uplifting of added value of mining commodities like processing purification, development of local content, labor, and Corporate Social Responsibility (CSR).

The Government’s vision in this case was to realize sustainable mineral resources management which was environmentally friendly, giving the greatest benefit to people’s prosperity. Among the Government’s mission was to exercise development in mineral and coal mining whereby to give maximum benefit and added value.

The Vision and Mission od DJMB to be realized by end of 2010 was among others to ensure supply of coal and mineral supply for domestic need of raw materials, realization of good mining practices. (supervision and advancement, collaboration in minery n central and regional governments in Indonesia For 2010). The association of Indonesian Coal Mining (APBI) predicted that Indonesia’s production of coal would reach 280 millions tons by next year. Chairman of APBI Bob Kamandaru said that if production realization were attained, it would exceed Government’s target 259 millions tons.

In 2010, production of coal reached 280 million tons, higher than Government’s target of around 250 tons. Bob who was also President of Berau Coal disclosed that coal production of this year could exceed Government’s target of 230 millions tons. By end of year, production of coal is predicted of coal is predicted to reach 260 million tons. Export destination countries are still India, China, and Japan for use in Power Plant. Meanwhile the main domestic consumer is still the State Electricity Company PLN.

Director General of Mineral and Coal Mining, Bambang  Setiawan explained that in 2010 PLN’s consumption of coal would increase. Today PLN’s need for coal is between 40-45 million tons, in 2010 PLN need would reach 60 to 70 million tons. This year Indonesia’s production of coal is estimated at 230 million tons, which 68.5 million tons, around 45-46 million tons were allocated for powerhouse.

About the Government’s policy that some energy raw materials had their strategic role in Indonesia‘s economic development, the energies were sought after in terms of quality and quantity, and the information about them were sought after. 

Energy problems should be anticipated with all efforts making inventories of various energy raw materials, on paper or field. Considering the importance of alternative energies as substitute to natural oil, focus on alternative energies would be relevant especially coal, since the resources are plentiful and most potential as industry fuel.

Coal explorations had been heightening in Indonesia especially since 1985 carried out by Government institutions or private companies. This was due to the increasing need for coal, for domestic need or for export. Coal sediments in Indonesia were abundant especially in Sumatra and Kalimantan and part of Java, Papua, and Sulawesi.

Data of 2005 had it that coal in Indonesia might be specified as low calorie (24.36%) medium calorie (61.42%), high calorie (13.08%) an extremely high calorie (1.14%). The volume of total resources came to 61,273,99 billion tons the resources were spread out in 19 provinces.

 The development of national mining industry was thanks to the growing domestic demand as well as over seas demand which increased year after year ; for the most part to serve overseas demand i.e. 72.11% on the average and the remaining 27.89% to fill domestic need. This was to considered the abundant coal resources in Indonesia. On the other hand the price of oil which remained high, demanded oil-based industries to change to coal energy.

The plan to develop Steam Powered Generators in Java and outside Java at local capacity of 10,000 MW, increasing cement production output year after year, and development of other industries such as pulp and textile, are all indications of growing demand for coal. Not to mention increasing demand for coal from overseas buyers, they all contribute to jacking up of coal production at home.

Pursuant the matter, the government issued National energy Strategy (KEN) through Regulation No. 5 year 2006 as revised version of General Energy Policy (KUBE) 1998. KEN has the main objective of securing sustainable national energy reserves and efficient utilization of energy and realization of effective energy-mix maximized toward 2025. for that matter dependency on one single energy like oil must be minimized by enhancing use of alternative energies like coal.

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