Over the last decade the Indonesian government, faced with at least a short to medium-term decline in domestic oil and gas production, has adopted a policy of attempting to diversify its domestic energy sources. In January 2004 the Indonesian government announced its National Coal Policy which aims to boost the development of coal-fired power stations and dramatically increase coal exports. This policy co-incided with Indonesia becoming a net oil importer.

While approximately 8% of Indonesia’s electricity is generated from hydropower, further developments are likely to be limited due to the high capital costs, limited infrastructure and environmental and social concerns. While the country currently has no operating nuclear power stations, in March 2008 the State Minister for Research and Technology, Kusmayanto Kadiman, optimistically proclaimed that the government would build four 1,2000 megawatt nuclear power stations in the next 17 years. It is proposed that the first of the plants would be operational by 2016/2017. However, with the presidential election due in 2009 and strong local opposition to nuclear power, it is uncertain how far the proposals will progress.

Since the early 1990’s Indonesian coal mining has grown dramatically. The World Coal Institute states that in 2005 Indonesia mined 152.2 million tonnes of which 27% was used domestically with the remainder exported. It is now the world’s second largest coal exporter behind Australia and is a major supplier to Asian countries. ABARE reports that between “1988 and 2005, thermal coal exports from Indonesia increased by an average of around 23 per cent a year.”

Coal Exports

ABARE, the Australian government’s resources agency, reports that 2006 Indonesia exported 170 million tonnes of thermal coal and estimated that this would grow to 186 million tonnes in 2007 and 201 million tonnes in 2008.

In an earlier review on the global coal trade, ABARE analyst Alan Copeland noted that thermal coal exports from Indonesia were estimated to have grown by approximately 33% in each of 2004, 2005 and 2006. “The growth in Indonesia’s exports reflects the ability of its coal industry to respond to the rapid growth in Asian demand for thermal coal, supported by unconstrained transport and port capacity. A significant proportion of coal transport in Indonesia is water based, which allows for coal to be transported along rivers via barges to the open sea for loading on to larger vessels,” he wrote.

However, a spin off to the dramatic rise in coal demand is the rise of illegal mining. In September 2005 the Washington Post reported on the staggering scale of coal-laden trucks — which are notionally banned from public roads — going all-night from “from scores of often-illegal mines” on their way to a local port. An anonymous senior official in Indonesia’s Ministry of Energy and Mineral Resources raised doubt about the accuracy of the Indonesian government’s official export figures. “I bet no one has current and accurate data about what is happening out there,” he said.

The World Coal Institute estimates that of the 107.3 million tonnes exported in 2005, 89 million tonnes was steam coal with the remainder being coking coal.

ABARE lists the main destinations for Indonesian thermal coal as being.

- Japan (approximately 25%);
- Chinese Taipei (17%)
- India (15%); and
- the Republic of Korea (13%).
Copeland also notes that India imports Indonesian low-ash coal for blending with its higher-ash content domestic coals.

In 2008, 997,370 tons of Indonesian coal was burned at the Bridgeport Harbor power plant in Bridgeport, Connecticut.

Domestic Consumption and Coal-Fired Power Stations

Between 1993 and 2003 there has been a 78% growth in domestic power generation capacity. (See Indonesia and coal/Installed electrical generating capacity). According to the WCI just over 48% of the capacity is from coal-fired power stations. In 2004 31 million tonnes of coal was used in power generation with a further 10 million tonnes for direct use by industry.

The rapid increase in coal-fired generating capacity is set to continue. PT Perusahaan Listrik Negara (PLN), the state-owned electricity utility, has proposed plans to add an additional 10,000 megawatts of coal-fired capacity by 2011.[10] However, the U.S. government’s Energy Information Administration is sceptical that the proposals, which seek private sector involvement, will come to much. “However,” the EIA wrote in a review of Indonesia’s energy generation sector, “foreign investors have largely avoided the Indonesian power sector in recent years due to the poor financial condition of PT PLN and the uncertain regulatory climate in the electricity sector.”[11] However, one driver of increased domestic coal consumption will be plans by PLN to convert a number of oil-fired power stations to coal-fired.

The most recent power stations that have come online are:

- the first 300 megawatt unit of the Cilacap plant; and
- the 1.3 gigawatt Tanjung Jati B plant.
Other coal-fired power stations in operation are:

- Paiton power station in eastern Java.

The newly elected government in India needs around US$500 billion in infrastructure spending in the five years ending in fiscal year 2012. India is facing a shortage of about 25,000 Mw power during peak hours. There are plans to add close to 78,000 Mw of power during the current five-year plan.

Some big Indian companies are making their best efforts to acquire mines overseas specially in Indonesia, South Africa, Mozambique, Australia etc. for their ambitious power projects in India. At present Indonesian law does not permit a foreign company to directly acquire the mines. There is no clarity as to how foreign companies can have mining rights and start production.

Indonesia’s government needs to accelerate reforms and changes in mining and energy regulations designed to give direct control to foreign investors, in order to win confidence and attract/invite major international coal companies into Indonesia.

Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal and is expected soon to topple Australia as the largest coal exporter. Indonesia’s strategic geographic location makes it the most preferred country for Indian companies for its proximity to the country, which means lower ocean freight charges and better timing compared to other countries such as Australia.

Indonesian coal is exported around the globe, including to India, Korea, Taiwan, Japan, EU, US and China which itself is a major coal producer but imports coal to meet the requirement of domestic industries.

The growth in Indonesia’s coal exports reflects the ability of its coal industry to respond to the rapid growth in Asian demand for thermal coal, supported by unconstrained transport and port capacity. A significant proportion of coal transport in Indonesia is water based, which allows for coal to be transported along rivers via barges to the open sea for loading onto larger vessels

The quality of Indonesian coal is much better than Indian coal. The gross calorific value of Indonesian coal ranges between 5,000 and 6,500 kilo calories per kilogram (kcl/kg); while for Indian coal it is only 3,000-4,500 kcl/kg.

India’s ambitious plans to generate an additional 78,000 Mw of power in five years may face hurdles if Indonesia goes ahead with plans to implement a domestic market obligation (DMO) policy to restrict coal exports to take care of domestic demand.

India is today one of the fastest growing economies and also has a shortage of power supply. Indonesia is one of the peaceful countries with huge natural resources and exporting coal to many countries for use in power plants for generating energy but it is paradoxical that Indonesia is short of energy. Many Indian companies are capable of sharing power technology and setting up mega power plants in Indonesia.

Indonesian private companies can buy equity stakes in India’s power plants in exchange for long-term coal supply. Since India is today one of the fastest growing economies and also has a shortage of power supply then such deals can be beneficial to both parties. source : thejakartapost.com

Produksi batubara nasional yang meningkat serta ekspektasi naiknya permintaan di pasar global membuat industri di sektor ini tak pernah kehilangan peminat. Tak hanya investor lokal tetapi juga asing.

Asosiasi Pertambangan Batubara Indonesia (APBI) yakin bahwa produksi batubara lokal tahun ini secara keseluruhan mampu mencapai 250 juta ton. Angka itu bertambah, dimana produksi batubara pada 2010 diperkirakan akan mencapai 270 juta ton.

Di lain sisi, negara pengekspor sumber energi tersebut, kini terlihat mulai mengambil posisi di Indonesia. Salah satunya China, yang mulai melirik perusahaan tambang batubara dalam negeri untuk kerjasama. Selain untuk memenuhi kebutuhan bahan bakar pembangkit listriknya, juga untuk mendiversifikasi cadangan devisa.

Misalkan saja China Investment Corporation (CIC) yang menandatangani perjanjian investasi senilai US$ 1,9 miliar atau sekitar Rp 19 triliun dalam format instrumen sejenis utang kepada PT Bumi Resources (BUMI).

Sebagai salah satu dari lembaga investasi terbesar dan terkemuka di dunia, CIC melihat prospek bisnis batubara yang menjanjikan di Indonesia. Manajemen BUMI dalam informasi tambahannya kepada BEI menyatakan transaksi tersebut tidak material karena berupa transaksi pembiayaan kembali (refinancing), sehingga investasi ini dianggap bukan pinjaman baru.

Adapun sisa dana tersebut akan digunakan untuk ekspansi produksi batubara BUMI yang kini sebesar 60 juta ton menjadi 100 juta ton (2011-2012). Jaminan pinjaman tersebut berupa saham BUMI di perusahaan batubara (diperkirakan KPC dan Arutmin)

Perusahaan lokal pun tak mau ketinggalan. Salah satunya PT AKR Corporindo (AKRA) yang saat ini sedang melakukan proses uji tuntas terhadap PT Anugrah Karya Raya, yang bergerak di sektor pertambangan.

Aksi ini untuk mendukung ekspansi di masa yang akan datang. Pada 5 Mei lalu, AKRA melakukan perjanjian gadai saham PT Jakarta Tank Terminal (JTT) terkait dengan transaksi penjaminan fasilitas kredit US$ 60 juta.

Ketertarikan itu juga dipicu kinerja positif yang ditunjukkan beberapa emiten batubara di tanah air. Salah satunya saham PT Indo TambangRaya Megah (ITMG), yang pada semester pertama kemarin, juga cukup positif, dengan laba bersih naik 129%. Kemudian marjin usaha naik dari 19% ke 32%, sedangkan average selling price (ASP) naik dari US$ 60 ke US$ 79 per ton.

Vice President, Research & Analysis Valbury securities Nico Omer Jonckheere masih memberi rekomendasi beli terhadap beberapa saham batubara, terkait leverage terhadap kenaikan harga batubara paling besar. Ia pun menargetkan harga ITMG dapat mencapai Rp 41.700. “Investor bisa buy on weakness di level Rp 24.200,” jelasnya.

Saham lain yang disarankan Nico adalah PT Adaro Energy (ADRO), menyusul rencana perseroan untuk memperoleh pinjaman sebesar US$ 500 juta dari sindikasi 12 bank lokal dan asing serta kemungkinan pembelian 3 juta ton batubara ADRO oleh Indonesia Power untuk memenuhi kebutuhan 3.400 MW pembangkit listrik tahun depan. “Kami rekomendasikan beli dengan target harga mencapai Rp 2.675,” ujarnya.

Menurutnya, kinerja perseroan cukup posiitif, dengan laba bersih naik 1.507%, dengan marjin usaha naik dari 21,4% ke 38,2%. Selain itu, perseroan juga berencana mengakuisisi tambang batubara milik BHP Billiton dan menaikkan produksi menjadi 80 juta ton/tahun. sumber berita dari inilah.com

JAKARTA, Nov 19 (Reuters) – Indonesian plans to cap coal exports to meet domestic demand will not hit global supplies in the near term, but could start to bite in three to five years as new power plants stoke demand in the world’s biggest exporter of thermal coal. Here is a snapshot of Indonesia’s coal industry.

RESOURCES :

Indonesia has total identified coal resources of 104.76 billion tonnes, with 86.61 percent consisting of low-quality coal of below 6,100 kcal/kg on an air-dried basis. It has mineable reserves of 20.99 billion tonnes. About 99 percent of the identified coal resources are located on the island of Sumatra and in the South and East Kalimantan provinces of Borneo. The rest is scattered on other islands. But coal resources are expected to rise further, as big areas such as Papua, have been largely unexplored.

EXPORTS Indonesia, the world’s biggest exporter of thermal coal, ships more than 70 percent of coal to the Asian market, with Japan the top buyer. Other key buyers include Taiwan, South Korea and India. The remainder is exported to Europe and America. Indonesian sub-bituminous coal is being increasingly used by power plants in major buyers since its low content of sulphur and ash makes it more environmentally friendly. Indonesian coal exports rose to 140.5 million tonnes in 2008, from 38 million tonnes in 1997.

DOMESTIC CONSUMPTION :

Electricity accounts for about 60 percent of Indonesia’s total domestic demand for coal, or 68 million tonnes this year. The use of coal for power generation is expected to increase in line with the government’s crash programme to add 10,000 Megawatts (MW) of generating capacity to ease chronic power shortages, with the first phase due to be completed in 2011 and consisting of coal-fired power plants.

INFRASTRUCTURE :

Indonesia is an archipelago of more than 17,000 islands and this allows it to easily increase coal shipments using waterways. Most coal mines in South and East Kalimantan are located near rivers or the open sea. There are plans underway to expand or build more onshore coal terminals, including one in West Java, with annual handling capacity of 5 million tonnes from Sumatra. State-owned coal miner PT Tambang Batubara Bukit Asam Tbk ( PTBA.JK: Quote, Profile, Research ) is an exception and it uses a railway to transport coal from its mine in Tanjung Enim in South Sumatra. In the future, railways may become a key mode of transport, with a number of projects in the pipeline. The government plans a 1,461 km (908 miles) railway in Kalimantan, Indonesia’s key coal producing area in Borneo. Bukit Asam also has approval for a 302-km rail line connecting its mine in Central Bangko in South Sumatra to the port of Lampung, on the tip of Sumatra island. [ID:nJAK347673] RAK Minerals & Metals Investments, a UAE investment fund, will also spend $1 billion to develop a rail link and terminal to ship coal from East Kutai, in East Kalimantan. [ID:nSP409627] Sources: Reuters, Energy and Mines Ministry, Indonesia Coal Producers Association ( Reporting by Fitri Wulandari; Editing by Ed Davies and Clarence Fernandez ) news sources from reuters india