Coal mining industry in Indonesia.
World's coal mining development
The world's coal consumption as a source of energy surged after the skyrocketing rise in the prices of oil in 2008. Coal trade, which has increased from year to year since 2004, was brisker after 2008.
The leapfrogging increase in demand for coal was attributable more too growing demand from fast expanding economies of two Asian giants, India and China. Increase was also recorded in demand in Asean countries using coal as an alternative source of energy to more expensive oil.
In he past five years coal trade surged in volume from 755 million tons in 2004 to 941 million tons in 2009. Coal consumption was estimated to reach 4,646 million tons in 2004.
Coal has become the main alternative source of energy to oil as shown by the growing domination of steam coal in coal trade. Steam coal is used mainly to generate electricity or to fuel boilers. In 1995, the world's steam coal trade was recorded only at 297 million tons, but in 2009, the figure shot up to 709 million tons.
Meanwhile, trade of coking coal which is used mainly as fuel in iron smelter, reached 196 million tons in 1995. The coking coal trade has been relatively stable rising only moderately over the next decade to reach 232 million tons in 2009.
Indonesia is world's second largest exporter
Indonesia has continued to boost its coal exports to meet growing demand in the world market and has become the second largest supplier of the material to the world market after Australia. Meanwhile, the positions of China and South Africa among coal exporting countries had declined as a result of their growing domestic consumption. Most of their coal consumption has been used to meet domestic requirement.
Other major suppliers of coal to the world market include Colombia, Russia and the United States.
Japan has become the world's largest importer of coal. Japan, a highly industrialized country, has relied heavily on imports for energy including coal and oil and gas. In r 2009, Japan's imports of coal totaled 165 million tons
China, which once was the largest coal producer and one of major coal exporters in the world, has become a net importer because of growing domestic consumption. India, which also ranks among major coal producers, has become one of the world's largest importers of coal to fuel its fast expanding industries.
Indonesia, which is the second largest coal exporting country in the world, ranks only the 7th in production. China is the world's largest producer turning out 2.48 billion tons of coal in 2008, but it is also the world's largest consumer, followed by the United States and India.
The world's coal production was estimated at 7,271 million tons in 2008 or an increase of 3.2% from 7,047 million tons in 2007. The production did not include brown coal or lignite, the type with low calorific value or low rank coal.
China and the United States are the largest producers and at the same time the largest consumers of coal in the world. In 2008, China's production of coal reached 2.84 billion tons and the United States recorded production at 1.17 billion tons. Most of their coal production is for domestic consumption. Meanwhile, Indonesia exports most of its coal production making it the second largest supplier to the world market although it is only the 7th largest in production. The Indonesia government, however, already started to restrict exports to guarantee domestic supply, which is fast growing especially to feed coal-fired power plants of the state electricity company PLN.
The United States has the largest coal reserves accounting for 27% of the world's total reserves, followed by Russia, China and India. World's proven coal reserves totaled 909 billion tons in 2005, according to the World Energy Council--including 246 billion tons in the United States.
According to data from the World Energy Council in 2005, Indonesia's proven coal reserves totaled only 4.97 billion tons, or around 0.5% of the world's proven reserves. The figure, however, was much lower than 6.9 billion tons, according to the Energy and Mineral Resources Ministry. The proven reserves even shot up 18.8 billion tons in 2009 as a result of brisker explorations boosted by the rise in coal prices. The world's reserves also have increased as some of the reserves considered not commercially feasible have become profitable reserves.
Types of coal and specifications
The types of coal include hard coal and brown coal or lignite. Each type has different characteristics. Following are the types and characteristics of coal found in Indonesia:
* Hard coal, coal having calorific value of more than 5700 kcal/kg (23.26 MJ/kg). Hard coal includes steam coal, coking coal, bituminous coal and anthracite.
* Brown coal has low calorific value. This type of coal includes lignite and sub-bituminous coal used mainly to fuel power plants.
* Steam coal is used for boilers/steam generators and heating stoves. This type of coal includes anthracite and bituminous coal with gross calorific value of more than 23,865 kJ/kg (5700 kcal/kg) but lower than that of coking coal.
* Coking coal is the type of coal used mainly to produce coke as a reducing agent in iron blast furnace. The gross calorific value of coking coal is more than 23,865 kJ/kg (5700 kcal/kg) ash free.
* Sub-bituminous coal is the type with gross calorific value between 17,435 kJ/kg (4165 kcal/kg) and 23,860 kJ/kg (5700 kcal/kg).
* Anthracite is the highest type in quality with the highest calorific value of more than 6,900 k.cal per kg. This type of coal has similar characteristics as those of steam coal.
* Lignite is the type of coal with gross calorific value of less than 4,165 kcal/kg (17.44 MJ/kg) containing volatile matter of more than 31% in dry condition. Lignite is also called Low Rank Coal, or Brown Coal.
* Coke is the result of carbonization of steam coal at a high temperature. This type is used a reducing agent in steel smelters.
Most coal reserves in Indonesia date back to the tertiary age or around 65 million years ago. Most or around 83% of the coal is brown coal including lignite and sub-bituminous coal, with only 20% made up of Bituminous and Anthracite. Indonesian coal is known to have low ash and sulfuric content, therefore, most of the country's coal is used for fuel or as steam coal causing low pollution.
Specifications of Coal
Each coal mine has coal with different characteristics. Meanwhile, the users such as power plants need coal with certain characteristics Specifications, therefore, are set by the users for coal they want with a number of quality parameters. Generally the quality parameters, according to the Bahana Tambang are as follows:
a) Calorie (Calorific Value or CV, cal/gr or kcal/gr)
CV indicates the energy value found in the coal generated by the burning of carbon, hydrogen nitrogen and sulphur.
b) Moisture in percentage
Moisture includes free moisture (FM) and inherent moisture (IM) both making up Total Moisture (TM). Moisture influences the use of prime air to dry coal.
c) Volatile Matters (VM), in percentage
VM content influences burning perfection and fire intensity based on the ratio of fixed carbon (FC) to volatile matters--called fuel ratio. The higher the fuel ratio, the more carbon in the coal not burned. If the ratio is more than 1.2, the burning is less perfect , slowing the process of burning.
d) Ash content in percentage
Ash will cause pollution, thirst and corrosion of equipment.
e) Sulphur content, in percentage
Sulphur content in coal is stated in Total Sulphur (TS). TS determine corrosion of the cool side of the air heating especially when working temperature is lower than the sulphur moisture point. It also affects the effectiveness ash catching in the electrostatic precipitator.
f) Fixed Carbon (FC) in percentage
The value of carbon content is higher for coal of higher quality. Carbon content and volatile matters are used in calculating the quality of fuel in the form of fuel ratio.
g) Coal size
Coal size is measured on span of fine and rough particles. The finest particles are not more than 3 mm and the roughest particles are as larger as 50 mm in diameter
h) Hard grove Grindability Index (HGI)
The performance of a pulverizer or mill is designed on a certain HGI. The machine for lower HGI coal must operate below its standard value to turn out coal with an equal level of fineness.
Following are examples of specifications of coal produced by state coal miner PT Bukit Asam (PTBA). This company sells five types of coal BA 58, BA 59, BA 67, and BA 70 with specifications as follows:
South Sumatra has largest coal deposits
Coal resources in Indonesia are scattered in a number of large islands including Sumatra, Kalimantan, Java, Sulawesi and Papua. Sumatra and Kalimantan have the largest reserves. Based on official data in 2009 of the Geology and Mineral Resources Directorate General, Sumatra had a total reserve of 52.44 billion tons or the largest, followed by Kalimantan with a total reserve of 51.92 billion tons.
According to data from the energy and mineral resources ministry in 2009, Indonesia's coal resources totaled 104.7 billion tons with proven reserves of 18.7 billion tons that commercially feasible. The commercial feasibility, however, depends on the coal price. The soaring price of coal in the last two years has resulted in a surge in the reserve categorized as proven.
The largest proven coal reserves are found in the province of South Sumatra. Based on data in January, 2009, South Sumatra had coal reserves totaling 9.54 billion tons. State company PT Bukit Asam (Persero) Tbk. has a large mine in Bukit Asam.
Other large reserves are found in the provinces of East Kalimantan and South Kalimantan operated by a number of companies like PT Adaro, PT Kaltim Prima Coal, PT Arutmin, etc.
Era of Working Contracts Over
Coal mining industry in Indonesia has expanded rapidly ever since the government allowed the private sector including foreign investors to operate in coal mining under what was called Contract of Work (COW). Previously, only two state companies, which were later merged to form PT Tambang Batubara Bukit Asam (PT BA) were allowed to mine for coal in the country.
The first generation of COW was signed in 1983 with 10 private companies, of which nine have produced coal. Among them are now the largest producers such as PT Adaro, PT Kaltim Prima Coal and PT Arutmin. The second generation of COW was signed in 1993-1996 with 18 companies including 8 companies now in the entering the process of production . Four other have stopped activities or have their license revoked.
In 1996, through Presidential Decree No. 75/1996, the government revised the system of coal management including in investment aspect through deregulation, simplification of bureaucracy and contracts. One of the most important revisions concerned regulation on contract from Coal Contract of Work (CCOW) to Coal Cooperation Contract (CCC) both with foreign (PMA) and domestic (PMDN) investors.
The era of COW, therefore, was over after the House of Representatives passed the Bill in Law on Mineral and Coal Mining in January, 2009. The Law No. 4 of 2009 put an end of the era of COW after 41 years being effective. The new law replaced the Law No. 11 of 1967 . Under the new law, mining company operate with license from the government instead of contract.
The change in the system of management is the most crucial in the amendment to the mining regulation as with the license, it gives superiority to the position of the state. Under the COW system the positions of both sides were equal, therefore, any revision of the contract had to be with the approval of both sides.
The Mineral and Coal Law also made clearer decentralization of authority in the management of the mining sector. Provincial and district administrations as well as city administrations are given the authority to issue mining licenses in their respective areas.
The mineral and coal law also recognizes the existence of individually mining enterprises. Another crucial matter concerns efforts to increase added value of minerals by obliging mining companies to build their processing factories in the country.
The new law will likely force mining companies to revise their investment plans, which were earlier adjusted to the COW. The energy and mineral resources ministry said the new law gives better investment certainty. The ministry will have to work immediately to wrap up draft regulations as implementation for the new law.
The mineral and coal law, however, still has some controversial points that created polemic over transfer stipulation which is regulated in Chapter 169 of points a, b and c.
The point a of the Chapter 169 says: The COW and working agreement issued before the new law was effective will remain effective until the end of their terms.
Many saw the Chapter as discriminative against new investors which have to go through stricter stipulations, which the old investors under the COW continue to enjoy incentives. The point a of Chapter 169 is seen as a protection for the existing COW miners.
Control of coal resources
Most coal resources have been controlled by companies operating under COW of the first generation like PT Adaro, PT Arutmin, PT Berau, PT Kaltim Prima Coal and state coal miner PT Tambang Batubara Bukit Asam.
Under the third generation of COW , there are two miners having coal reserves of more than 1 billion tons PT Pendopo Energi Batubara in South Sumatra and PT Yamabhumi Palaka in West Kalimantan, but the two mines have not started production. They are still in the process of explorations.
PT Yamabhumi is the only COW company operating in West Kalimantan and discovered a large reserve of 4.21 billion tons of coal. Based on the official data from the Geology and Mineral Resources Directorate General, by January, 2004, coal reserves in West Kalimantan were not more than 527 million tons.
Coal production up 13.9% per year
In the past 10 years the country's coal production has grown fast. The coal production grew 13.9% on the average annually in the period of 2001-2009 from 92 million tons to 226 million tons. The soaring oil prices forced many countries to look for alternative cheaper sources of energy. Coal is one of the most available alternative. Coal producers such as Indonesia, therefore, boosted their coal production. Indonesia has exported most of its coal production.
Coal production cost in Indonesia is relatively cheaper and Indonesian coal is very suitable to fuel power plants as it causes no much pollution with low sulfur content. It is expected that Indonesia's brown coal production will increase to meet growing demand especially from state electricity company PLN to fuel its coal-fired power plants.
Production by provinces
Kalimantan accounts for most or more than 90% of the country coal production. The largest producer among the provinces is East Kalimantan, which produced 127 million tons in 2009.
Kalimantan is strategically located being close to fast emerging markets in Asia notably China and India, making it more competitive facing other suppliers such as Australia.
South Sumatra has huge coal reserves, but most of the reserves are largely untapped with only PT Bukit Asam as major operator in that region.
Source: Geology and mineral resources directorate general, Data
Production by companies
Six companies dominate coal mining sector in the country accounting for more than 80% of he country's total production. The six companies are BUMI Energi (the owner of PT Kaltim Prima Coal and Arutmin), which produced around 58 million tons of \coal in 2009, Adaro with production of 40.6 million tons, Kideco 24.7 million tons, Banpu Group 20.7 million tons, Berau 14.3 million tons and state owned company PT Tambang Batubara Bukit Asam (PT BA) with production of 10.8 million tons in 2009.
The largest single producer is PT Adaro Indonesia, followed by PT Kaltim Prima Coal (KPC) with production of 40.6 million tons and 38.15 million tons respectively in 2009.
Domestic coal trade
The country exports most of its coal production. In 208, only 68 million tons of the country's total productions of 194 million tons were disposed of on the domestic market. In the past three years domestic consumption of coal has increased sharply especially for new power plants. Coal has been used as substitute for expensive oil fuel. The government is building new coal-fired power plants with a total capacity of 10,000 megawatts expected to be completed in 2011.
The soaring oil prices have also prompted the use of coal to fuel other industries in the country such as cement, ceramic and steel industries.
More than 70% of coal production exported
Most of the country's coal production is exported although there is growing portion sold on the domestic market. Domestic consumption has been less than 30% of the production. The soaring oil prices have resulted in an increase in coal requirement in the country.
From 2000 to 2008, exports rose 12.2 % per year from 587 million tons in 2000 to 160 million tons in 2008.
The largest portion of Indonesia's coal exports has been to Japan, Taiwan, South Korea, Hong Kong, and India. Japan has been the largest country of destination to which exports totaled 24 million tons in 2005. Exports to Japan had not increased significantly over the past several years as that country has stopped building coal-fired power plants, which are seen as major sources of pollution in that country. Other Asian countries, however, need growing supply of coal to fuel power plants and other industries.
Coal requirement growing in Indonesia
Coal consumption in the country reached only 41 million tons in 2005 or around 30% of the country's total production. In the following years, the requirement rose to reach 69 million tons in 2008.
Until 2006, coal consumption in Indonesia as one of the world's largest coal producers, was relatively low. Coal accounted only for 35% of the country's energy consumption as against oil fuel, which accounted for 41%.
The high contribution of oil fuel was partly caused by the subsidy provided by the government for oil fuel. In 2006, when oil price began to scale up to more than US$ 70 per barrel, the government and the business sector began to seek alternative sources of energy and coal came as the most potential and easily available.
In 2006, the government began the program of substituting oil fuel with coal as fuel for power plants. The state owned electricity company PLN launch a big program to build coal fired power plants with a total capacity of 10,000 MW. Many of the power plants have been operational in 2010. The program has pushed up demand for coal in the country. In 2010, an addition of 40.8 million tons of coal is estimated to be needed in 2010 for the new power plants.
In 2010, the government launched another plan to build more power plants with a total capacity of 10,000 MW to be completed in 2014. The new power plants include coal-fired and gas fired power plants. Other plants use renewable sources of energy including geothermal and water energy. PT PLN estimated that coal consumption in 2014 will reach 95.3 million tons or an increase of 133.57% from coal consumption of 40.8 million tons in 2009. In 2014, coal requirement for power plants of PLN and Independent Power Producer (IPP) is predicted to rise to 95.3 million tons.
Based on data at PLN, a number of coal-fired power plants (PLTU) in Java with a total capacity of 11,725 MW are expected to be operational in 2010-2014. In the same period, Sumatra will have new steam powered electricity plants coming on line with a total capacity of 2,916 MW, Kalimantan 914 MW and in Sulawesi with a capacity of 822 MW. The steam powered electricity plants are dominated by coal-fired power plants.
Domestic market Obligation
Demand for implementation of the Domestic Market Obligation (DMO) scheme is growing after PLN and IPP started building coal-fired power plants each with a total capacity of 10,000 MW.
Coal requirement, therefore, will increase sharply after the project has been completed.
In order to guarantee coal supply for the new power plants the government has issued regulation on DMO which requires coal producers to set aside part of their production for domestic consumption. The regulation of the minister for energy and mineral resources No 34 Year 2009 is aimed at coping with or preventing shortage in coal supply in the country.
The minimum percentage of coal production to be sold on the domestic market for 2010 is determined with a decision of the energy and mineral resources minister No 1604 in 2009. The percentage for 2011 is determined with a decision of the minister No. 2360 in 010.
It is estimated that domestic coal requirement in 2011 will reach 78.97 million tons including 66.28 million tons for PLTUs; 034 million tons for metallurgy industry. And 12.35 million tons for cement, fertilizer, pulp and textile industries.
In 2011, the country's coal production is predicted to reach 326.65 million tons. Coal producers, therefore, are required to set aside 24.17% or 78.97 million tons of their production for domestic consumption. See the following table.
Coal prices up again
The price of thermal coal has hit the level of US$ 100 per ton on spot market. The price of thermal coal on spot market according to the Global Newcastle has reached US$ 100 per ton while Chinese reserve shrank 24%. The surge in the coal price followed the rising oil prices, now reaching more than US$80 per barrel. The market development has prompted investors to acquire coal stocks.
The surge in the coal prices in the world market since early 2010 is feared to affect coal supply for coal-fired power plants (PLTU) in Indonesia. In February 2010, the price of coal with a calorific value of 6,200 was US$ 83.46 per ton, up from US$ 35 in 2008. The surge in the price of coal followed improvement in the world's economic condition after the global financial crisis in mid 2008.
Early 2008, the price of coal with a calorific value of 6,200 was US$ 75 per ton, down to US$ 35 per ton by the end of 2008 in the wake of the global crisis.
In 2010, the coal prices continued to scale up to reach US$ 83.46 per ton by March. The price was US$ 71.56 per tons for coal with a calorific value of 5700; US$ 62.10 per ton for one with a calorific value of 5000 and US$ 50.07 for one having the lowest calorific value. Later the coal price continued to pick up. Toward the end of 2010, the price of thermal coal hit the level of US$ 100 per ton on spot market.
The Indonesian Association of Coal Producers (APBI) predicted the price of coal will rise next year to follow the growing demand both on the domestic and international markets.
APBI executive director Supriatna Sahala said coal prices are expected to reach US$90-US$100 per ton in 2011 for one of high category based on the Indonesian Coal Index (ICI 1) and US$ 80 per ton for one of the category of ICI 2. The coal price hike is also expected to rise with the closure of a number of mines by China.
Coal benchmark price
The government has issued regulation No. 17 in 2010, on the procedure of determining the benchmark price of coal and minerals. The regulation of the energy and mineral resource minister came into effect on 23 September 2010.
This regulation as said in chapter 27 is not effective on coal producers which have signed contract on spot sales or term sales and have renegotiated price adjustment in line with the order of the minister or the director general.
For producers having signed contract for spot sales are required to comply with the regulation in 6 months. Producers having signed term sale contract are required to comply with the regulation in 12 months
This regulation is used by the government as the reference in calculating state revenues both by the Supreme Audit Agency (BPK) and the Financial and Development Supervisory Board (BPKP).
Before, the ministerial regulation No 17/2010 was issued the benchmark price was used only for coal mining companies holding contract of work (PKP2B). With the ministerial regulation No. 17/2010, holders of IUP and IUPK licenses for coal and mineral production were required to sell minerals or coal based on a benchmark price both for domestic and international sales including sales to affiliates.
All holders of mining license are required to comply with the ministerial regulation No. 17/2010. The regulation serves as a benchmark for both producers and consumers in calculating prices under spot or contract sales.
Determination of prices also involves governors and the regents or mayors as said in chapter 9. A governor determines the benchmark prices for mining products every month through coordination with the director general. Mayors or regents coordinate with the governor.
A mechanism is determined to set prices based on the prevailing regulation in international market. The government uses four coal price indices--New Castle Index, Global Coal, Platts, and Indonesia Coal Index (ICI).
In October 2010, the government determined coal benchmark price (HBA) at US$92.68 per ton. The benchmark price is an average of 4 (four) coal price indices--Indonesia Coal Index/ICI 1, Platts 1, New Castle Export Index/NEX, and New Castle Global Coal Index/GC. Coal quality used in calculating HBA is Gross Calorific Value (GCV) 6322 kcal/kg gar; Total Moisture (TM) 8%; Total Sulfur (TS) 0.8%; Ash Content (AC) 15%.
Coal marker price is set by counting Marker Coal Benchmark Price. There are 8 types of coal produced in Indonesia selected as marker coal. The coal types reflect the quality of coal traded most and best known in the market. The marker coal benchmark price is used as reference to determine the prices of other coal of the same type.
Prospects of coal business and opportunities in Indonesia
In the coming years, the world will continue to seek renewable sources of energy as an alternative to oil fuel. Therefore, coal and natural gas will be higher in demand. Coal will be the main alternative especially for power plants. Demand for electric energy is growing fast in emerging markets like China, India and Indonesia.
Coal requirement in Indonesia is forecast to grow fast in the coming years. In 2014, more units of PLTUs will come on line pushing up coal requirement in the country. Coal requirement for power plants in 2014 is predicted to reach 95.3 million tons or doubling requirement in 2009. PLN said a number of new PLTUs in Java with a total capacity of 11,725 MW will come on stream in 2010-2014. The capacity of new PLTUs in Sumatra in the same period is 2,916 MW, in Kalimantan 914 MW and in Sulawesi it is 822 MW.
Coal demand is predicted to continue to grow until 2010 especially from China and India to feed heir power plants. Meanwhile, supply is forecast to decline in international market with China restricting coal exports since 2008 through imposition of a 10% export tax to better guarantee domestic supply. Supplies from Australia and South Africa are also predicted to decline resulting in a surge in price of that commodity.
Indonesia has taken over the lead in coal exports from Australia. Currently the main buyers of coal from Indonesia are Japan, South Korea and Taiwan, other than China and India which are relatively new customers for Indonesia.
Although the price of coal has reached US$ 80 per ton, coal is still cheaper than oil and LNG. Based on a survey in 2008, generating 1 MGW/h of electricity using coal was US$ 12.98 (assuming coal price of US$ 90 per ton) as against a cost of US$ 30 with oil fuel (assuming oil price is US$ 54 per barrel) and US$ 20.47 using LNG (assuming LNG price is US$6/mmbtu) (Bagus P. Perdana, Coal Outlook, 2008).
Currently coal price has climbed again after declining in 2009. The resurge in oil price now nearing US$ 100 per barrels makes demand higher for coal especially to generate electricity.
The prospect of investment in coal mining in Indonesia, therefore, remains encouraging. Based on a survey, coal producers recorded profit twice as large as coal miners in Australia.
Based on a study by the PWC in 2008, the net profit margin of coal miners in Indonesia was 22.5% in 2006, up to 29.2% in 2007 before down to 22.8% in 2008. Coal miners in Indonesia posted a decline in debt to equity ratio and enjoyed an increase in assets.
Other performance indicator is earning before interest, tax and amortization (EBITDA) margin of 41.2% in 2006, up to 48.6% in 2007 before down to 38.7% in 2008. The Return on Capital Employed was 26% in 2006, up to 40.6 % in 2007, before down to 24.1% in 2008. Return on Shareholders fund was 39.4% in 2006; up to 63.7% in 2007 before down to 39% in 2008. Net Debt to Equity Ratio was 46.5% in 2006, down to 23.9% in 2007 but up again in 2008 to 27, 8%.
With coal prices resurging, the financial performance of coal producers in the country is expected to improve in 2010. The prospects remain encouraging in the next 10 years with considerable reserves and growing demand on the domestic market.
Table--1 World's coal trade, 1995 -2009 (Million tons) Year Steam Coking Total Trade 1995 297 Mt 196 Mt 494 Mt 2000 421 Mt 188 Mt 609 Mt 2004 541 Mt 214 Mt 755 Mt 2009 709 Mt 232 Mt 941 Mt Sources: BP, IEA, IISI, SSY Table--2 Main coal exporting countries in the world, 2005-2008 (000 tons) 2005 2006 2007 2008 World 936,044 1,000,619 1,073,409 1,087,330 Australia 254,978 254,960 268,510 277,991 Indonesia 142,038 192,216 221,856 228,154 Russia 98,590 103,351 112,231 115,418 United States 49,942 49,647 59,163 81,519 Colombia 59,119 68,337 74,517 81,470 China 93,079 85,626 75,409 68,751 South Africa 78,751 75,781 72,555 68,168 Canada 31,259 31,243 33,354 36,541 Kazakhstan 28,294 30,512 32,764 29,971 Vietnam 19,827 23,496 35,144 22,773 Sources: BP, IEA, IISI, SSY Table--3 Largest coal importing countries--2009 (Million tons) Country Total Steam Coking Japan 165Mt 113Mt 52Mt PR China 137Mt 102Mt 35Mt South Korea 103Mt 82Mt 21Mt India 67Mt 44Mt 23Mt Chinese Tapei 60Mt 57Mt 3Mt Germany 38Mt 32Mt 6Mt UK 38Mt 33Mt 5Mt Sources: BP, IEA, IISI, SSY Table--4 Growth of world's coal production, 1999-2008 (Million MT) Year World Pertumbuhan (%) 1999 4,902 2000 4,893 -0.2% 2001 5,162 5.5% 2002 5,275 2.2% 2003 5,667 7.4% 2004 6,223 9.8% 2005 6,542 5.1% 2006 6,769 3.5% 2007 7,047 4.1% 2008 7,271 3.2% Sources: BP, IEA, IISI, SSY Table--5 World's largest coal producing countries, 2004-2009 (Million tons) Region and Country 2004 2005 2006 2007 2008 North America 1,196 1,215 1,248 1,236 1,259 Canada 73 72 73 75 75 Mexico 11 12 13 14 13 United States 1,112 1,131 1,163 1,147 1,172 Central and South America 73 81 88 93 104 Colombia 59 65 72 77 87 Other 14 16 16 16 18 Europe 1 809 793 791 799 774 Bosnia and Herzegovina 10 10 11 12 11 Bulgaria 29 27 28 31 32 Czech Republic 68 68 69 69 66 Former Serbia and Montenegro 45 39 0 0 0 Germany 233 227 221 226 214 Greece 77 76 71 73 72 Hungary 12 11 11 11 10 Macedonia 8 8 7 7 6 Poland 178 175 171 160 158 Romania 35 34 38 39 38 Slovenia 5 5 5 5 5 Spain 23 21 20 19 11 Turkey 51 64 71 83 84 United Kingdom 27 22 20 18 19 Other 7 5 46 46 48 Eurasia 2 466 483 507 514 563 Estonia 15 16 16 18 18 Kazakhstan 96 95 106 108 120 Russia 285 301 314 319 356 Ukraine 66 67 68 65 66 Other 4 4 4 4 3 Middle East 1 1 2 2 2 Africa 274 276 276 279 266 South Africa 268 270 270 273 260 Zimbabwe 4 4 4 4 4 Other 2 2 2 2 2 Asia and Oceania 1 3,404 3,693 3,858 4,124 4,303 Australia 388 405 405 429 439 China 2,300 2,501 2,572 2,744 2,848 India 447 473 500 528 568 Indonesia 157 188 250 292 313 Mongolia 7 8 9 11 11 North Korea 35 38 39 33 41 South Korea 4 3 3 3 3 Thailand 22 23 21 20 20 Vietnam 28 36 43 47 44 Other 16 18 16 17 15 World 6,223 6,542 6,769 7,047 7,271 Sources: US EIA, IES, Table--6 World's proven coal reserves, 2005 (Million tons) Anthracite Sub- and bituminous Country bituminous and Lignite Total --USA 111.338 135.305 246.643 Total North America 115.669 138.763 254.432 Total S. & Cent. America 7.701 12.192 19.893 --Russian Federation 49.088 107.922 157.010 Total Europe & Eurasia 112.256 174.839 287.095 Total Africa & Middle East 50.581 174 50.755 ASIA PACIFIC --Australia 38.600 39.900 78.500 --China 62.200 52.300 114.500 --India 90.085 2.360 92.445 --Indonesia 740 4.228 4.968 --Japan 359 -- 359 --North Korea 300 300 600 --Pakistan -- 3.050 3.050 --Thailand -- 1.354 1.354 --Other Asia Pacific 280 833 1.113 Total Asia Pacific 192.564 104.325 296.889 TOTAL WORLD 478.771 430.293 909.064 Share of total Country R/P ratio --USA 27,1% 240 Total North America 28,0% 231 Total S. & Cent. America 2,2% 269 --Russian Federation 17,3% * Total Europe & Eurasia 31,6% 241 Total Africa & Middle East 5,6% 200 ASIA PACIFIC --Australia 8,6% 213 --China 12,6% 52 --India 10,2% 217 --Indonesia 0,5% 37 --Japan -- 323 --North Korea 0,1% 20 --Pakistan 0,3% -- --Thailand 0,1% 64 --Other Asia Pacific -- Total Asia Pacific 32,7% 92 TOTAL WORLD 100,0% 155 Source of reserves data: Survey of Energy Resources, World Energy Council Reserves-Production (R-P) ratio--If the reserves remaining at the end of the year are divided by the production in that year, the result is the length of time that those remaining reserves would last if production were to continue at that level. Table--7 Types and Characteristics of Coal Types of coal Characteristics Uses Anthracite --High carbon content --Iron ore smelter --Sulfur 1 % --Smokeless basic material --Calorie 6,900 k. cal/kg --Active carbon Bituminous --Volatile matters 15--23% --Cement factories --Sulfur 1% --Other industries --Calorie 5,900 k. cal/kg Sub --<8% --Power plants Bituminous --Sulfur <0.6% --Other industries --Calorie >4.900 k. cal/kg Lignite --Abu <6% --Power plants --Sulfur <0.5% --Other industries --Calorie >4,000 k. cal/kg Composition Types of of deposits Mining coal (%) methods Anthracite 0.36 Underground mining Bituminous 14.38 Open pit mining Sub 26.63 Open pit Bituminous mining Lignite 56.83 Open pit mining Source: General mining/coal directorate general Table--8 Specifications of coal of PT BA Coal Brand CV (Kcal/ TM IM Ash kg, adb) (%, ar) (%,adb) (%, adb) BA 58 5800 28 14.0 8.0 BA 59 5900 28 14.0 8.0 BA 63 6300 22 10.5 7.0 BA 67 6700 18 9.0 7.0 BA 70 7000 14 7.0 7.0 Coal Brand VM FC TS (%, adb) (%, adb) (%, adb) BA 58 40 37.0 0.8 BA 59 40 37.5 0.8 BA 63 40 43.0 0.8 BA 67 40 44.5 0.7 BA 70 40 47.5 0.7 Source: PT BA Table--9 Locations of coal reserves in Indonesia By locations and volume per 1 January 2009 (million Tons) Resource Province Hyporthetic Inferred Indicated Banten 5.47 5.75 0.00 West Java 0.00 0.00 0.00 Central java 0.00 0.82 0.00 East Java 0.00 0.08 0.00 Naggroe Aceh Darussalam 0.00 346.35 13.40 North Sumatera 0.00 7.00 0.00 Riau 12.79 467.89 6.04 West Sumatera 24.95 475.94 42.72 Bengkulu 15.15 113.09 8.11 Jambi 190.84 1,462.03 243.00 South Sumatera 19,909.99 10,970.04 10,321.10 Lapung 0.00 106.95 0.00 West Kalimantan 42.12 482.60 1.32 Central Kalimantan 122.72 974.40 17.33 South Kalimantan 0.00 5,525.16 362.59 East Kalimantan 14,206.97 10,995.62 4,689.37 South Sulawesi 0.00 144.94 33.09 Central Sulawesi 0.00 1.98 0.00 North Maluku 2.13 0.00 0.00 West Irian Jaya 89.40 61.86 0.00 Papua 0.00 2.16 0.00 Total 34,622.53 32,144.66 15,738.07 Resource Reserves Province Measured Total Banten 2.09 13.31 -- West Java 0.00 0.00 0.00 Central java 0.00 0.82 0.00 East Java 0.00 0.08 0.00 Naggroe Aceh Darussalam 90.40 450.15 0.00 North Sumatera 19.97 26.97 0.00 Riau 1,280.82 1,767.54 1,940.37 West Sumatera 188.55 732.16 36.75 Bengkulu 62.30 198.65 21.12 Jambi 173.20 2,069.07 9.00 South Sumatera 5,883.94 47,085.07 9,542.01 Lapung 0.00 106.95 0.00 West Kalimantan 1.48 527.52 0.00 Central Kalimantan 471.89 1,586.34 74.28 South Kalimantan 6377.81 12,265.56 3,523.24 East Kalimantan 7,646.03 37,537.99 3,633.04 South Sulawesi 53.09 231.12 0.12 Central Sulawesi 0.00 1.98 0.00 North Maluku 0.00 2.13 0.00 West Irian Jaya 0.00 151.26 0.00 Papua 0.00 2.16 0.00 Total 22,251.57 104,756.83 18,779.93 Source: Coal and Mineral Statistics, Geology and Mineral Resources Directorate General Per 1 January 2009 Table--10 Miners having largest coal reserves in Indonesia (more than 1 billion tons) Companies Status Regency PT BA State Owned Adaro Indonesia, PT Generation I Paringin, Tabalong, Arutmin Indonesia, PT Generation I Kotabaru, Tanah Laut Berau Coal, PT Generation I Berau Indominco Mandiri, PT Generation I East Kutai, Kutai Kaltim Prima Coal, PT Generation I East Kutai Kideco Jaya Agung, PT Generation I Pasir Pendopo Energi Batubara, PT Generation III Muara Enim Yamabhumi Palaka, PT Generation III Sintang Total Reserves (million Companies Province ton) Description PT BA South 6.559.00 Producing Sumatera Adaro Indonesia, PT South 1,967.42 Producing Kalimantan Arutmin Indonesia, PT South 2,513.90 Producing Kalimantan Berau Coal, PT East 2,745.76 Producing Kalimantan Indominco Mandiri, PT East 1,249.70 Producing Kalimantan Kaltim Prima Coal, PT East 3,472.00 Producing Kalimantan Kideco Jaya Agung, PT East 1,050.40 Producing Kalimantan Pendopo Energi Batubara, PT South 1,525.83 Exploration Sumatra Yamabhumi Palaka, PT West 4,212.00 Exploration/ kalimantan Feasibility Study Source: Geology and Mineral Resources Directorate General Table--11 Indonesia's coal production, 2001--2010 *) Year Production Growth % 2001 92.54 2002 104.2 12,6% 2003 112.79 8,2% 2004 129.64 14,9% 2005 149.66 15,4% 2006 179.58 20,0% 2007 178.79 -0,4% 2008 194.39 8,7% 2009 226.17 16,3% 2010 *) 125.17 Average growth 13,7% Note: *) up to April 2010; Source: Geology and mineral resources directorate general, Data Consult Table--12 Coal production by provinces, 2005-2009 (Tons) Regions 2005 2009 West Sumatra 81.576 1.770 South Sumatra 8.559.124 11.590.592 Riau 555.528 1.514.753 Bengkulu 219.059 391.474 Jambi 3.967.804 South Kalimantan 56.828.990 80.072.888 East Kalimantan 82.127.897 127.081.633 Central Kalimantan 1.549.526 Total 149.666.233 226.170.443 Source: Geology and mineral resources directorate general, Data Consult Table--13 Coal production per year by companies, 2009--2010 *) Companies 2,009 2,010 Adaro Indonesia, PT 40,590,189 18,008,173 Kaltim Prima Coal, PT 38,154,491 22,623,884 Kideco Jaya Agung, PT 24,692,299 14,350,902 Baturona Adimulya, PT -- 68,322 Batualam Selaras, PT -- 4,529 Total 226,170,443 125,176,525 Note: *) provisional data up to April 2010 Table--14 Domestic coal trade, 2000 -2008 (Tons) Year Total 2000 22,340,845 2001 28,363,185 2002 29,257,002 2003 39,273,850 2004 36,081,734 2005 41,350,737 2006 48,995,069 2007 60,470,001 2008 69,106,931 Source : Directorate General of Mineral, Coal and Geothermal Table--15 Indonesia's coal export by countries of destination Coal Year Other Japan Taiwan Asian Europe 2000 13,177 13,520 19,819 8,862 2001 15,216 11,507 20,441 10,227 2002 16,530 13,100 30,606 9,295 2003 17,992 14,144 34,022 12,787 2004 19,013 16,678 34,687 11,987 2005 24,237 14,524 41,394 14,824 2006 23,128 17,070 49,590 21,005 2007 24,322 18,112 63,358 15,839 2008 26,948 14,887 70,606 19,207 Coal Total Year Pacific Others 2000 1,876 1,206 58,460 2001 2,161 5,730 65,281 2002 2,555 1,451 73,536 2003 3,118 3,618 85,681 2004 3,584 7,809 93,759 2005 3,928 11,882 110,790 2006 5,263 27,577 143,633 2007 4,598 33,644 159,874 2008 2,964 25,389 160,000 Source: Coal directorate, Data Consult Table--16 Domestic coal consumption by sectors User industries 2005 2006 Iron & Steel 221,309 299,990 Power Plant 25,669,226 27,758,317 Ceramic & Cement 5,152,162 5,300,552 Pulp & Paper 1,188,323 1,216,384 Briquette 28,216 36,018 Others 9,091,501 14,383,808 Total 41,350,737 48,995,069 User industries 2007 2008 Iron & Steel 282,730 317,856 Power Plant 31,420,000 31,041,000 Ceramic & Cement 6,443,864 6,842,403 Pulp & Paper 1,526,095 1,251,000 Briquette 25,120 43,000 Others 20,772,192 29,611,672 Total 60,470,001 69,106,931 Source: Geothermal and mineral resources directorate general, Data Consult, processed Table--17 PLTUs coming on line in 2010-2014 Location Year New power plants coming on stream Java 2010 PLTU Suralaya (625 MW), PLTU Indramayu (900 MW), PLTU Rembang (630 MW), and PLTU Paitons 7 (660 MW). 2011 PLTU Lontar (945 MW), PLTU Pelabuhan Ratu (1.050 MW), PLTU Pacitan (630 MW), and PLTU Cirebon (660 MW). 2012 PLTU Paitons 3 (815 MW), PLTU Tanjungjati B 3-4 (1.320 MW), PLTU Celukan Bawang (130 MW), PLTU Tanjung Awar-awar (700 MW), PLTU Adipala (660 MW) and PLTU Central Java (2.000 MW). PLTUs in 2010-2014 PLTU Meulaboh (200 MW), PLTU Pangkalan Sumatra Susu (440 MW), PLTU Tarahan (200 MW), PLTU Simpang Belimbing 227 (MW), PLTU Pesisir Sumbar (224 MW), PLTU Riau (2x100 MW), PLTU Pangkalan Susu (2x200 MW), PLTU Banjasari (200 MW), PLTU South Sumatra 2 (225 MW), PLTU Mulut Tambang Sumsel unit 1 (300 MW) and PLTU Mulut Tambang Riau unit 1 (300 MW). P. Kalimantan 2010-2014 PLTU Asam-asam (130 MW), PLTU Pangkalan Bun (14 MW), PLTU New Kaltim (50 MW), PLTU Pulang Pisau (120 MW), PLTU Muara Jawa (200 MW), PLTU New Kalsel (2x100 MW), and PLTU New Kaltim (2x100 MW). P. Sulawesi 2010-2014 PLTU North Sulawesi 2 (50 MW), PLTU Gorontalo (50 MW), PLTU Molotabu (20 MW), PLTU North Sulawesi 1 (2x25MW), PLTU Gorontalo (12 MW), PLTU Kotamobagu I (40 MW), PLTU Barru (100 MW), PLTU South Sulawesi 1 (2x100 MW), PLTU Talakar (2x100 MW), PLTU Talakar 2 (1x100 MW). Source: PLN Table--18 Estimate of domestic coal consumption by sectors, 2011 Million No Companies/consumers Tons Percentage GCV (GAR) 1 PLTU a. PT PLN (Persero) 55,82 70,69% 4.000-5.200 b. IPP 8,97 11,36% 4.000-5.200 c. PT Freeport Indonesia 0,83 1,05% 5.650-6.150 d. PT Newmont Nusa Tenggara 0,47 0,60% 5.2 e. PT Pusaka Jaya Palu Power 0,19 0,24% 5 2 METALURGI a. PT Inco 0,14 0,18% 5.9 b. PT Antam Tbk 0,20 0,25% > 6.000 3 SEMEN, PUPUK, PULP DAN TEKSTIL a. Semen 8,86 11,22% 4.100-6.300 b. Pupuk 0,92 1,16% 4.000-5.000 c. Pulp 0,60 0,76% 4.500-5.000 d. Tekstil dan Produk Tekstil 1,97 2,49% 5.000-6.500 Total 78,97 100% Source: Energy and mineral resource ministry Table--19 Average price of coal, 2001-2006 GAD 6700 Year Price (US$/ton) 2001 31.58 2002 25.68 2003 26.27 2004 53.47 2005 Q1 51.90 Q2 52.01 Q3 48.06 Q4 39.68 2006 Q1 47.31 Q2 52.85 2009 2010 Sources: Barlow Jonker Spot Price Table--20 Marker price for evaluation in September 2010 Typical quality CV (kcal/ TM NO BRAND kg GAR) (%, ar) TS (%) Main types of coal 1 Gunung Bayan 1 7.000 10,0 1,0 2 Prima Coal 6.700 12,0 0,6 3 Pinang 6.200 14,5 0,6 4 Indominco IM_East 5.700 17,5 1,6 5 Melawan Coal 5.400 22,5 0,4 6 Envirocoal 5.000 26,0 0,1 7 Jorong J-1 4.400 32,0 0,3 8 Ecocoal 4.200 35,0 0,2 Marker price for coal price Typical evaluation quality in September NO Ash (%) 2010 1 15,0 99,79 2 5,0 97,55 3 5,5 87,92 4 4,8 75,50 5 5,0 70,89 6 1,2 65,20 7 4,2 52,58 8 3,9 47,61 Sources : energy and mineral resource ministry
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|Title Annotation:||INDUSTRY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Date:||Oct 1, 2010|
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