indonesia coal supply outlook

8/7/2019 Indonesia Coal Supply Outlook

1/21

Day 2 Tuesday 16 October 2007

Session 6: Coal Supply Outlook

Speech 3 Indonesia

Coal Supply Outlook in Indonesia

Dr. Ir. Sukma Saleh Hasibuan

Director

Directorate of Mineral, Coal & Geothermal Program Supervision

Ministry of Energy and Mineral Resources (MEMR)

Indonesia


2/21

DR. Ir. SUKMA SALEHHASIBUAN, ME

Place of Birth: Tanjung Balai, North Sumatera, Indonesia

Date of Birth: April, 7th, 1951

Nationality: Indonesia

Institution: Directorate of Mineral, Coal and Geothermal Program Supervision,

Directorate General of Mineral,Coal and Geothermal

The ministry of Energy and Mineral Resources,Indonesia

Position: Director

Office Address:Jl. Prof. Dr. Soepomo SH No. 10, Jakarta Selatan, Indonesia

e-mail : [email protected]

PROFESSIONAL EXPERIENCES:

2007 now :Director of Mineral, Coal and Geothermal Program Supervision, Ministry of Energy and Mineral

Resources

2004 2007:Head of Center for Energy and Information Energy on Mineral Resources Center, Ministry of Energy

and Mineral Resources


3/21

DR. Ir. SUKMA SALEH

HASIBUAN, ME

2001 2004:Secretary of Educational and Training Agency for Energy and Mineral Resources, Ministry of Energy

and Mineral Resources

1995 2001:Head of Division for Compilation and Reporting Program, Directorate General of Mines, Ministry of

Mine and Energy

1993 1995:Head of Section for Counseling, Directorate Technique of Mines

1983 1993:Head of Section for Mining Effort, Directorate Technique of Mines

EDUCATION :

1 Bandung Institute of Technology, Bachelor on Mining Engineering (Graduated 1978)

2 Sendai, Japan of Tohoku University, Master Degree on Engineering (Graduated 1987)

3 Sendai, Japan of Tohoku University, PhD on Engineering (Graduated 1990)


4/21

Directorate General of Mineral Coal and GeothermalMinistry of Energy and Mineral Resources The Republic of Indonesia

ByDr. Sukma Saleh Hasibuan

OUTLOOK COAL SUPPLY AND DEMAND IN INDONESIA

2007 Clean Fossil Energy Seminar

Xian, China, 15 17th October 2007


5/21

Introduction

NONO ISLANDISLAND QUALITY (QUALITY (CaloryCalory)) CRITERIONCRITERION((grgr/cal)/cal) RESOURCESRESOURCES(Mill. Ton)(Mill. Ton) RESERVESRESERVES(Mill. Ton)(Mill. Ton)

11 JAWAJAWA LowLow--MediumMedium

HighHigh--Very HighVery High

< 5100< 5100 61006100

61006100 -- 71007100

19,2419,24

2,972,97

0,000,00

0,000,00

22 SUMATERASUMATERA LowLow--MediumMedium


< 5100< 5100 61006100

61006100 71007100

26.872,526.872,5

1.780,661.780,66

2.636,622.636,62

134,11134,11

33 KALIMANTANKALIMANTAN LowLow--MediumMediumHighHigh--Very HighVery High

< 5100< 5100 6100610061006100 71007100

25.375,6925.375,696.844,446.844,44

2.769,012.769,011.219,11.219,1

44 SULAWESISULAWESI LowLow--MediumMedium


< 5100< 5100 61006100

61006100 71007100

218,42218,42

14,6814,68

0,060,06

0,000,00

55 MALUKUMALUKU LowLow < 5100< 5100 2,132,13 0,000,00

66 PAPUAPAPUA LowLow--MediumMedium


< 5100< 5100 61006100

61006100 71007100

120,35120,35

30,9130,91

0,000,00

0,000,00

Total Resources in 2006Total Resources in 2006 61.273,9961.273,99 6.758,906.758,90

4,07%

28,37%

40,13%

1,58%

7,58%

17,7%

COAL RESOURCES AND RESERVES


6/21

Lignite 58.6 %

Sub Bituminous 26.6 %

Bituminous 24%

Anthracite 0.4.

34.7 BT (+ 60 % ) I ndonesians coal potential having Calorific value

less than 5,100 Kcal/ kg

Introduction

Situation of Coal in Indonesia :

Coal resources 61. 27 BT, Mine able Reserve 6.7 BT, mostlyLow-Rank Coal


7/21

INTRODUCTION

Continued

Indonesia is the worlds largest exporter of thermal coal.

It is one of the leading exporters of sub-bituminous coalthat represents the bulk of Indonesian coal production


8/21

Oil is stil l the most important commodity to support theOil is stil l the most important commodity to support thenational economic development to meet the energynational economic development to meet the energyconsumption demand.consumption demand.

The level of oil util ization to oil reserve is estimated aboutThe level of oil util ization to oil reserve is estimated about

10 years, and Indonesia may become a net10 years, and Indonesia may become a net--oil importeroil importerbefore 2015.before 2015.

Coal w ill play very important role for Government ofCoal w ill play very important role for Government ofIndonesia to shift the grand strategy of energy utilizationIndonesia to shift the grand strategy of energy utilizationand consumption, and the security of energy supply.and consumption, and the security of energy supply.

For the times being, coal sector in Indonesia is stil l continueFor the times being, coal sector in Indonesia is stil l continueto grow.to grow.

A few years ahead Indonesia coal production will steadily toA few years ahead Indonesia coal production will steadily toincrease.increase.

The coal sector contribution into Indonesian economicThe coal sector contribution into Indonesian economicrecovery w ill be more significantrecovery w ill be more significant ..

Introduction


9/21

The grand policy and strategy may include Optimizing asfollows:

- The National Energy Mix;

- Energy resources development;

- Energy allocation among the various activities;

- Energy allocation in order to generate state revenue

CURRENT COAL DEVELOPMENTCURRENT COAL DEVELOPMENT


10/21

Indonesian Government has introduced a National Coal Policy (NCP)in the framework of national energy development .

NCP is a guidance for promoting coordination and harmonization inmanagement, exploitation, utilization and development of coalresources within period 2005 -2020.

The NCP Program divided into three period of time :- Short Term Program until the year 2005;- Medium Term program until the year 2010;- Long Term Program until the year 2025.

continued

.Current Coal Development


11/21

Coal is developed as part of diversification energy policy.

Coal development policy may include how to increase coal production :- to meet ever increasing domestic coal demand on sustainable basis;

- to enhance coal competitiveness in the international market;

- to develop all coal qualities and add value through both energy andnon energy applications;

- to ensure the growth of the coal industry consistently with the conceptof sustainable development and environmental protection


Export are expected more increase in realization 2007 About 60% of coal export went to East Asia such as Japan, South Korrea, Taiwan,

Hong Kong, less than 10% to ASEAN Countries, and about 15% to Europe, andmost of which will continue to go to the Asia-Pasific market.

Indonesia will continue to export of coal in order to increase our country incomeand also to increase the domestic utilization of coal


12/21


NOTE;NOTE;

--. Realization production 2006 (32 PKP2B = 162 M ton, KP. Realization production 2006 (32 PKP2B = 162 M ton, KP-- PTBA = 9.2 M ton, 130 Regional KP = 22 M ton);PTBA = 9.2 M ton, 130 Regional KP = 22 M ton);

--. Production increase in 2006 due to increase of PKP2B productio. Production increase in 2006 due to increase of PKP2B production 10 M ton ( PTn 10 M ton ( PTAdaroAdaro Indonesia, PTIndonesia, PT

KPC and PTKPC and PT IndomincoIndominco MandiriMandiri ) and increase of Regional KP production 12 M ton;) and increase of Regional KP production 12 M ton;

--. Projection of 2006 based on production of 32 PKP2B+ KP. Projection of 2006 based on production of 32 PKP2B+ KP--PTBA = 158 M ton and 34 regional KP = 10 MPTBA = 158 M ton and 34 regional KP = 10 M

tonton

45

148

193

49

134

183

53

145

198

75

150

225

90

150

240

130150

280

170150

320

220

150

370

0

100

200

300

400

(MillionsTonnes

2006 2007 2008 2009 2010 2015 2020 2025

Indonesian Coal Mining Industry Projection

Domestic Export Production

continued


13/21


continued

COAL DOMESTIC CONSUMPTION 2005COAL DOMESTIC CONSUMPTION 2005 --20252025

258.8258.8196.2196.2122.1122.174.974.935.235.229,8229,82TotalTotal

37.837.827.027.010.810.82.02.0----6. Liquefaction6. Liquefaction

UBC Product forUBC Product for

exportexport25.525.517.017.08.58.51.71.7----5. UBC5. UBC

Direct Use+ briquetteDirect Use+ briquette10.010.09.09.07.07.05.05.01.01.00.020.024. Small Industries4. Small Industries

(textile,(textile, briectbriect

burningburning

roof/roof/llimstonellimstone, etc), etc)

12.012.011.011.010.010.07.07.01.51.51.31.3

3.3. MetalirgyMetalirgy industryindustry

and Pulpand Pulp peperpeper

In average 1 ton coalIn average 1 ton coal

= 6.6. ton cement= 6.6. ton cement

resultedresulted17.017.013.013.011.0011.0010.010.06.56.55.55.52. Cement2. Cement

Electricity growthElectricity growth

7%7%156.5156.5119.2119.274.874.849.249.226.226.223.023.01. Electricity1. Electricity

RemarksRemarks202520252020202020152015201020102005200520042004

( R)( R)ConsumerConsumer


14/21

INDONESIAN COAL PROGRAMINDONESIAN COAL PROGRAM

1.1. Convert the dieselConvert the diesel--fired power plant, which have 7,753 megawattsfired power plant, which have 7,753 megawatts

(MW) capacity, into coal(MW) capacity, into coal--fired power plants and build 10,000 MWfired power plants and build 10,000 MW--capacity new coalcapacity new coal--fired plants in year 2009/2010.fired plants in year 2009/2010.

Total demand of Low Rank Coal for development of power plants inTotal demand of Low Rank Coal for development of power plants in

2010 is approximately 72,3 Million ton, using lignite coal for 12010 is approximately 72,3 Million ton, using lignite coal for 17.753 MW7.753 MW

electricity. The total demand of coal for electricity in the yeaelectricity. The total demand of coal for electricity in the year 2015 willr 2015 willbe app. 90 million ton and 2025 will reach 200 million ton.be app. 90 million ton and 2025 will reach 200 million ton.

2.2. To achieve securing coal supply, the Government is providing anTo achieve securing coal supply, the Government is providing an

incentives for low grade coal development, underground mining,incentives for low grade coal development, underground mining,marginal reserves, and coal mining development in remote areas imarginal reserves, and coal mining development in remote areas inn

order to encourage investment in such areas.order to encourage investment in such areas.


continued


15/21

Mining Authorization Holder (MA) : 442 Compaies

- Production Stage : 169 Companies- General Survey and Exploration Stages : 273 companies

Coal Contract of Work (CCoW): 81 Companies

- Production Stage : 35 Companies- General survey, exploration, feasibility and construction stages : 46Companies


Current Situation of Coal Industry :

continued


16/21

The Government Mechanism for Resources Management inRegional Authonomy era

Since 1 January 2001 the authority to manage natural resources has been

transferred to Autonomous Regions (Base on the location of Mining Area)

Mineral and coal development in term of licencing authority shifted to theregional government.

The central government concentrate on the National Mineral and Coal Policy

and give direction fo the implementation of such policy in term of guidance andstandard.

The regional government will honour the above policy both for executing themining development as well as for the local rules issued.

Coal Contract of Work (CCoW) still managed by central government(Directorate General of Mineral, Coal and Geothermal).

The Central Government continous to give counseling to the autonomous

regions concerning various matters regarding the management of mineralresource.


continued


17/21

The Challenges of the Mining Industry in Indonesia


Long Term Contracts;

Taxation System and Royalties;

Conflict in Regions;

Illegal Mining activities;

Overlapping with forestry areas;

Environment issue;

And other certainties in Laws and Regulation throughoutIndonesia.

continued


18/21

Governm ent s Ef for t

The Government effort to resolve the challenges are :

Issuing a Ministerial of Energy and Mineral Resources Decree No:

1614/2004 regarding Guidelines on Application Process of Contract ofWork (Cow) and Coal Contract of Work (Cow);

Issuing of Law 19/2004 on the amendment of Forestry Law No.41/1991;

Determination of National Coal Policy; A draft of Amendment of Government Regulation has been also

prepared to settle fiscal problem;

Finalization discussion for the Draft of Mineral and Coal Mining Law as

replacement of the Mining Law No. 11/1967.

continued



19/21

One type license or mining permit, no more contractOne type license or mining permit, no more contractapplied between mining company and the government;applied between mining company and the government;

Foreign mining company will be taken contract with theForeign mining company will be taken contract with theState Owned Mining Company;State Owned Mining Company;

Simplification of Licensing Permit stages; Exploration andSimplification of Licensing Permit stages; Exploration andExploitation;Exploitation;

Determination of mining areas through bidding and selfDetermination of mining areas through bidding and selfreservation;reservation;

Community development is focused for local peopleCommunity development is focused for local peoplewelfare;welfare;

THE BASIC PRINCIPLE OF NEW LAW OF MINERAL AND COAL MINING

continued



20/21

CONCLUDING REMARK S

1. The present situation is showing tentative signs that with thegovernment right policy framework and a strong commitment

to reform, the coal mining sector will get clarity and certainty torestore investor confidence.

2. The coming Mineral and Coal Mining Law hopely will create a

better mining development in Indonesia in terms of:- good investment climate;

- clear of authority among Central Government, Provisional

Government and District Government;

- adopted the sustainable development principal

- giving the maximum for the people walfare.


21/21

indonesia coal supply outlook

Documents