Tuesday, 23 September 2014


Average production of coal in the world reached 8.5 billion tons a year, and that amount was consumable to meet the energy needs of the human race. China is the largest producer in the world with an average production per year at about 3.7 billion tons, followed by the United States which produces 800-900 million tons.

Meanwhile, India produces coal at averagely 600 million tons per year. Yet however, the emerging nation is still importing coal of 120 million tons from Indonesia. Indonesia is the biggest coal exporter in the world because the Indonesian domestic market has not been developed, so that most of the national coal production is destined for export.

The Ministry of Energy and Mineral Resources (ESDM) reported that in 2014, the government aims to produce 400 million tons of coal, slightly down about 5% of the realization in 2013 which reached 421 million tons. Of the total production target this year, about 95 million tons or 23.7% will be used domestically, while the rest is exported to several countries, such as China and India.

R. Sukyar, Director General of Mineral and coal at the Ministry of Energy and Mineral Resources, in Jakarta, on Wednesday (August 20), stated that due to high coal exports, domestic coal consumption is low. So the government is seeking to increase domestic demand, from around 65 million tons in 2013 to 95 million tons this year.

In the year, Sukyar said, the government focused more on increasing state revenues by increasing surveillance and increasing coal royalties. So, without raising coal production figures, the government can gain bigger revenue from this sector. Sukyar admitted that coal is still the mainstay of the mining sector to achieve the target set by the government.

He said that coal contributed around 80% to total state revenue from the mining sector. Moreover, following a ban on export of minerals since January 12, 2014, it makes the role of the coal sector very important, because this policy will cause foreign exchange loss of USD 5 billion to Indonesia.

The Ministry of Energy and Mineral Resources estimated that domestic coal demand for 2014 reached 95,5 million tons with the largest allocation to the PT PLN (Persero) at 57.4 million tons, followed by IPP at 19.9 million tons and the cement industry at 9.8 million tons. While, the domestic Market Obligation (DMO) is 25.90%.

He said that coal mining companies are required to meet the minimum percentage of coal sales for domestic interest at 25.90% of the estimated coal production in 2014 at 369 million tons, which originates from 50 companies as holders of Coal Mining Agreement, one state-owned company, an 34 companies as holders of coal mining business license.

The Ministry of Trade began to disseminate the Minister of Trade Regulation No. 39 Year 2014. The Regulation contains rules on coal export which will come into force on 1 September 2014, the regulation stipulates that every implementation of coal exports must first obtain a registered coal exporter (ET Batubara) from the government.

Technical Executive Officer of the Director of Industry and Mining Export of the Ministry of Trade, Thamrin Latuconcina, said that the recognition as ET Batubara is stipulated by the Director General of Foreign Trade. He also mentioned that in order to gain recognition as ET Batubara, the company concerned must file a request to the Director General of Foreign Trade.

It is explained that ET Batubara is valid for three years and can be extended. The submission of the request should be accompanied with an attached copy of Production Operations IUP, Production Operation IUPK, and sales or Special Production Operations IUP for processing and refining. On the other hand, the company concerned shall also attach a Taxpayer Identification Number (NPWP), copy of Company Registration (TDP), which is recommended by the Director General of Mineral and Coal of the Ministry of Energy and Mineral resourced.

In response to this matter, the Indonesian Association of Energy and Coal Suppliers (Aspebindo) considered that the regulations concerning the requirements for coal exports are harmful to entrepreneurs. Entrepreneurs considered that the rules are good, but actually contain a problem.

According to the Secretary General of Aspebindo, Ekawahyu Kasih, the regulation should better be postponed until all is announced. He worried that this regulation could lengthen the bureaucracy chain. Not to mention that there is requirement that to obtain a recommendation as registered exporter, there must be a permission from the local government.

He said that currently employers are too traumatized because licensing is always identical to costs. The key word, he said, is that this rule is basically good, but it would be better if the Ministry of Energy and Mineral Resources settled its work regarding the Clean and Clear (CNC) status, the number reached thousands of IUP. So, do not included requirements that have not been settled. (E)

Business News - August 22, 2014

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