Last update: 2 September 2016
This book is a part of an on-going research on energy business in Indonesia, including a near exhaustive profile of renewable energy in the world and its increasing trends. This part will be updated in a timely manner.
The book is titled by “Energy Industry in Indonesia & World's Renewable Energy”. The book is available on a print-on-demand basis. The flash version is for demo purpose only and available only to be served in Greater Jakarta, Indonesia.
You may reach the publisher for demo request, inquiries, and purchase order from this number:
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4. Coal Mining Business in Indonesia – iii
Foreword
Coal deposits all around the world may have been declining. It’s on the surface, but not in deep
underground. Extracting coal physically beneath the earth, majorly under the deep seabed, is not an
easy task to fulfill and complete. Some advantages may have come for digging coal out of the
underwater. Coal washing doesnot need special water resources and treatment, but from the sea or
ocean. Every thing must have a plus and a minus. It depends on what perspectives you’ve taken all
along.
The choice then lend it to the tasks of extracting the coal ores, that is the molecular carbons in gas,
namely CO, CH4, and H2. Syngas, they used to call it as the term. But not the CO2. CO2 is mostly
considered as the public enemy number one to be captured and imprisoned in a dungeon, deep
underground, for good. Various CO2 absorbents have been sought and developed, along with the
technologies to filter out the impurities embedded with coal, namely SOx and NOx.
Many have mixed up inappropriately the understandingness between coal gasification and coal
combustion. Even FoE. Those two coal treatments are different things. The first is heating the coal,
while the second is burning the coal. Both process involves massive thermal chain reactions. The
problems with UCG is that how can you guarantee that it is the coal seam and the intended ones that
has been gasified.
How about the walls, the roofs, the floors, and the layers buffering the coal seams? How about if the
words of collapse and/or cracks applied to those layers? Won’t they initiate a flow of the
unexpected such as a mud flow for example as in Porong, Sidoarjo, East Java, Indonesia, that hasn’t
stopped since it began to erupt on 29 May 2006.
Even worse is how the earth is burning the coal seams underground. Burning Mountain of Mount
Wingen in New South Wales has been burning for 6000 years, Brennender Berg in German since
1688, Smoking Hill in NW Canada since its discovery in 1826, Emalahleni in South Africa since
1953, and Centralia in Pennsylvania since 27 May 1962.
The list doesnot include the burning of methane in Derweze, Turkmenistan since 1971, known as
door to hell; Baba Gurgur oilfield nearby Kirkuk, Irak for 2500 years, known as eternal fire; Yanar
Dag near Baku, Azerbaijan since 1950s, known as land of fire.
The unanswered questions to protect the environment underground and the surrounding area has left
many UCG projects to be terminated, cancelled, withdrawn, neglected, abandoned, forbidden. They
are all due to lack of environmental protection technologies, and most of all understandingness how
to deal and cope it before hand.
Therefore, UCG is not an option to exploit coal deposits underground. At least for now, and some
decades to come.
Jakarta, 31 August 2016
Sando Sasako
Email: sandosako @ yahoo.com
Mobile: +62 812 8056 516
5.
6. Coal Mining Business in Indonesia – v
Contents
Foreword....................................................................................................................................... iii
Contents ..........................................................................................................................................v
List of Tables .................................................................................................................................ix
List of Figures .................................................................................................................................x
Global Trends in Energy Industry....................................................................................................1
The Saudi Factor..........................................................................................................................1
The Revolutionary US Shale........................................................................................................3
Primary Energy Consumption in the World .................................................................................5
Global Coal Trends..........................................................................................................................8
Coal Price Dynamics in the World...............................................................................................9
Fracking Coalmines...................................................................................................................11
Coal Gasification.......................................................................................................................12
Underground Coal Gasification..............................................................................................15
Kincardine UCG, Scotland, UK .............................................................................................16
Raven and Hat Creek Coalfield, BC, Canada .........................................................................19
Global Warming or Global Heating ...........................................................................................21
Greenhouse Gas.....................................................................................................................23
CO2 as One of GHGs ............................................................................................................25
Oxygen Carriers.....................................................................................................................26
CO2 Recovery .......................................................................................................................28
Underwater Coalmines ..............................................................................................................29
Hashima Coal Mine, Japan.....................................................................................................30
Okinoyama Coal Mine, Japan ................................................................................................31
Beizao Coal Mine, China .......................................................................................................31
Bomlo Coal Mine, Norway....................................................................................................33
Cape Breton Coal Mines, Nova Scotia, Canada......................................................................35
Solway Coal Mines, Cumbria, UK.........................................................................................39
North Sea Coal Mines, NE England .......................................................................................40
Forth Coal Mines, Scotland, UK ............................................................................................41
The End of Deep Coal Mines in the UK.................................................................................42
Energy Business in Indonesia in a brief .........................................................................................45
Coal-Bed Methane.....................................................................................................................47
The Milestone of CBM Commercialisation............................................................................49
CBM Asia @ Kutai West PSC...............................................................................................50
Dart Energy & IGas ...............................................................................................................52
Dart Energy & NuEnergy.......................................................................................................53
Coal...........................................................................................................................................61
History of Coal Business in Indonesia....................................................................................66
Regulatory Frameworks.........................................................................................................69
The Dutch Colonialism ......................................................................................................69
The Mining Law of 1967 ...................................................................................................69
The Production Sharing Contract in Coal Mining of 1975 ..................................................71
7. vi – Coal Mining Business in Indonesia
The Coal Contract of Work of 1981 ...................................................................................71
Forced Localisation............................................................................................................72
Issues on Enviromental and Decentralisation .........................................................................74
Ministerial Regulations (Permen ESDM) ...........................................................................75
Ministerial Decrees (Kepmen ESDM)................................................................................77
Clean and Clear: The Causes..................................................................................................80
The Non-CNC Status .........................................................................................................82
Unclear DMO System........................................................................................................85
Forestry Land Use Permit...................................................................................................89
Korsup Minerba .................................................................................................................90
CCoW Companies: The First Generations..............................................................................93
BHP Kendilo Coal Indonesia .............................................................................................98
BHP Businesses in Indonesia ...........................................................................................100
Rio Tinto..........................................................................................................................100
Tata Power.......................................................................................................................101
Arutmin Indonesia ...........................................................................................................103
Kaltim Prima Coal ...........................................................................................................103
Bumi Resources...............................................................................................................105
The IndoCoal Deals......................................................................................................105
Asmin Koalindo Tuhup....................................................................................................107
Allied Indo Coal...............................................................................................................108
References...................................................................................................................................111
Directory of Coal Mining Companies in Indonesia ......................................................................115
Abadi Batubara Cemerlang ..................................................................................................115
Abadi Coal Cemerlang.........................................................................................................115
Aceh Resources and Mineral................................................................................................115
Aceh Resources and Mineral Core .......................................................................................115
Adaro Indonesia...................................................................................................................115
Adimas Baturaja Cemerlang ................................................................................................115
Allied Indo Coal , PT...........................................................................................................116
Andhika Mutiara Etam.........................................................................................................116
Andhika Mutiara Lestari ......................................................................................................116
Andhika Mutiara Sejahtera...................................................................................................116
Antang Gunung Meratus......................................................................................................116
Anugerah Jatimulia..............................................................................................................117
Anugerah Jatimulya .............................................................................................................117
Arutmin Indonesia ...............................................................................................................117
Asmin Bara Bronang............................................................................................................117
Asmin Bara Jaan..................................................................................................................117
Asmin Koalindo Tuhup........................................................................................................117
Astaka Dodol.......................................................................................................................118
Bahari Cakrawala Sebuku ....................................................................................................118
Bangun Banua Persada Kalimantan......................................................................................118
Bara Mutiara Prima..............................................................................................................118
Bara Pramulya Abadi...........................................................................................................119
Bara Sentosa Lestari ............................................................................................................119
Bara Utama Unggul .............................................................................................................119
8. Coal Mining Business in Indonesia – vii
Baradinamika Mudasukses...................................................................................................119
Baramarta, PD .....................................................................................................................119
Baramarta ............................................................................................................................119
Baramulti Sukses Sarana......................................................................................................120
Baramulti Suksessartana ......................................................................................................120
Baramutiara Prima...............................................................................................................120
Barasentosa Lestari..............................................................................................................120
Batu Alam Selaras ...............................................................................................................120
Batubara Duaribu Abadi, PT................................................................................................120
Batubara Selaras Sapta, PT ..................................................................................................120
Baturona Adimulya..............................................................................................................121
Benakat Energi ....................................................................................................................121
Benakat Energy ...................................................................................................................121
Bentala Coal Mining............................................................................................................121
Berau Coal...........................................................................................................................121
Bharinto Ekatama ................................................................................................................121
Bima Duta Batubara Sakti....................................................................................................122
Borneo Bhaktibara Utama....................................................................................................122
Borneo Indobara ..................................................................................................................122
Buana Bara Utama...............................................................................................................122
Bukit Baiduri Enterprises.....................................................................................................122
Bukit Sunur .........................................................................................................................123
Bumi Laksana Perkasa.........................................................................................................123
Bumi Panen Sukses..............................................................................................................123
Bumi Sukse Mandiri............................................................................................................123
Buntok Perdana Coal Mining ...............................................................................................123
Calicari................................................................................................................................123
Coal Duaribu Abadi.............................................................................................................123
Coal Selaras Sapta ...............................................................................................................124
Danau Mas Hitam................................................................................................................124
Daya Lapan .........................................................................................................................124
Delma Mining Corporation ..................................................................................................124
Dhamar Tejokencono...........................................................................................................124
Dharma Puspita Mining .......................................................................................................124
Dutaputra Tanaratama..........................................................................................................125
Ekasatya Yanatama..............................................................................................................125
Energi Batubara Sumatera....................................................................................................125
Energy Batubara Sumatra ....................................................................................................125
Fajar Bumi Sakti..................................................................................................................125
Firman Ketaun Perkasa ........................................................................................................125
Galicari................................................................................................................................125
General Sakti Kreasindo ......................................................................................................126
Generalindo Prima Coal.......................................................................................................126
Gunung Bayan Pratama .......................................................................................................126
Gunung Bayan Pratama Coal ...............................................................................................126
Hulubalang Inti Bumi ..........................................................................................................126
Indexim Coalindo ................................................................................................................126
Indominco Mandiri ..............................................................................................................127
Insani Bara Perkasa..............................................................................................................127
Interex Sacra Raya...............................................................................................................127
Intitirta Prima Sakti..............................................................................................................127
Intitirta Primasakti ...............................................................................................................128
9. viii – Coal Mining Business in Indonesia
Jorong Barutama Greston.....................................................................................................128
Juloi Coal.............................................................................................................................128
Kadya Caraka Mulia ............................................................................................................128
Kalimantan Energi Lestari ...................................................................................................128
Kalteng Coal........................................................................................................................129
Kaltim Prima Coal ...............................................................................................................129
Kartika Selabumi Mining.....................................................................................................129
Karunia Poladaya Bumi .......................................................................................................129
Karya Bumi Baratama..........................................................................................................129
Kendilo Coal Indonesia........................................................................................................130
BHP Kendilo Coal Indonesia ...............................................................................................130
Kideco Jaya Agung..............................................................................................................130
Kitadin.................................................................................................................................130
Kodeco Horna Mandiri ........................................................................................................130
Kurnia Sarana Lestari ..........................................................................................................130
Kutai Kertanegara Prima Coal..............................................................................................130
Lahai Coal ...........................................................................................................................131
Lanna Harita Indonesia ........................................................................................................131
Lianganggang Cemerlang ....................................................................................................131
Mahakam Sumber Jaya ........................................................................................................131
Mandiri Intiperkasa..............................................................................................................131
Mantimin Coal Mining.........................................................................................................132
Marunda Graha Mineral.......................................................................................................132
Marunda Grahamineral ........................................................................................................132
Maruwai Coal......................................................................................................................132
Maruai Coal.........................................................................................................................132
Meulaboh Energitama..........................................................................................................132
Meullaboho Energitama.......................................................................................................133
Mitrajaya Timuragung .........................................................................................................133
Multi Harapan Utama ..........................................................................................................133
Multi Tambangjaya Utama...................................................................................................133
Nusa Minera Utama .............................................................................................................133
Nusantara Termal Coal (D/A Nusantara Thai Coal) .............................................................134
Nusantara Thai Coal ............................................................................................................134
Pari Coal..............................................................................................................................134
Pendopo Energi Coal ...........................................................................................................134
Pendopo Energy Batubara....................................................................................................134
Perkasa Inakakerta...............................................................................................................134
Persada Permata Mulya........................................................................................................135
Persada Permata Mulia.........................................................................................................135
Pesona Khatulistiwa Nusantara ............................................................................................135
Pinang Jaya Sarana Bara ......................................................................................................135
Pinangjaya Sarana Bara .......................................................................................................135
Ramdany Coal Mining .........................................................................................................135
Ratah Coal...........................................................................................................................135
Restubara Karya Pratama.....................................................................................................136
Riau Bara Harum .................................................................................................................136
Salamindo Coalindo.............................................................................................................136
Salamindo Pahala.................................................................................................................136
Santan Coal..........................................................................................................................136
Santan Batubara...................................................................................................................136
Sarwa Sembada Karya Bumi................................................................................................136
10. Coal Mining Business in Indonesia – ix
Selatan Selabara...................................................................................................................137
Selo Argodedali...................................................................................................................137
Selo Argokencono Sakti.......................................................................................................137
Senamas Energindo Mulya...................................................................................................137
Senamas Energindo Mulia ...................................................................................................137
Sinar Benua Prima ...............................................................................................................138
Sinarindo Barakarya ............................................................................................................138
Singlurus Pratama................................................................................................................138
Solok Bara Adipratama........................................................................................................138
Sumber Barito Coal .............................................................................................................138
Sumber Kurnia Buana..........................................................................................................139
Suprabari Mapanindo Mineral..............................................................................................139
Tambang Damai ..................................................................................................................139
Tanito Harum ......................................................................................................................139
Tanjung Alam Jaya ..............................................................................................................140
Tanjung Alam Raya.............................................................................................................140
Taraco Mining .....................................................................................................................140
Teguh Persada Coal .............................................................................................................140
Teguh Reksa Daya...............................................................................................................140
Teguh Sinar Abadi...............................................................................................................140
Tempayang Cemerlang ........................................................................................................141
Timah Batubara Utama ........................................................................................................141
Torah Antareja Mining ........................................................................................................141
Trimarta Coal Perkasa..........................................................................................................141
Trimata Buana .....................................................................................................................141
Trimata Benua .....................................................................................................................141
Trimata Coal Perkasa...........................................................................................................142
Trubaindo Coal Mining........................................................................................................142
Wadung Mas Tambang Mulia..............................................................................................142
Wadungmas Tambang Mulia ...............................................................................................142
Wahana Baratama Mining....................................................................................................142
Whirakaneo Coalindo ..........................................................................................................142
Whiratama Bina Perkasa......................................................................................................142
Yamabhumi Palaka..............................................................................................................143
List of Tables
Table 1 – Primary Energy Consumption in the World by Countries, 2005-2015 (mtoe) ...................5
Table 2 – Primary Energy: Consumption in the World by Countries and by Fuel Type, 2014
(mtoe).......................................................................................................................6
Table 3 – Primary Energy: Consumption in the World by Countries and by Fuel Type, 2015
(mtoe).......................................................................................................................7
Table 4 – BP coal prices, 1987-2015 ($/tonne).................................................................................9
Table 5 – US coal export price, 2010q1-2016q1 ($/short tons).........................................................9
Table 6 – Coal In-Place Resources for Upper Limestone Fm + Limestone Coal Fm,
Kincardine, Nov.2014.............................................................................................17
Table 7 – Coal In-Place Resources for Upper Limestone Fm, Kincardine, Nov.2014 .....................17
Table 8 – Coal In-Place Resources for Limestone Coal Fm, Kincardine, Nov.2014 .......................17
Table 9 – Coal In-Place Resources, Kincardine, Nov.2014 ............................................................18
Table 10 – Estimates of trace chemicals abundance in the global atmosphere, 1980.......................25
Table 11 – Overview of existing chemical-looping combustors .....................................................28
11. x – Coal Mining Business in Indonesia
Table 12 – Some undersea coalmines in Solway Firth, Cumbria, UK.............................................39
Table 13 – CBM Resources in Indonesia .......................................................................................47
Table 14 – The 20 largest shareholders of Dart Energy Limited, 20100914....................................52
Table 15 – Some subsidiaries of IGas which were held through subsidiaries, 30 June 2015 ...........53
Table 16 – Coal reserves in Indonesia, 2014 ..................................................................................62
Table 17 – Coal supply in Indonesia, 2000-2014............................................................................63
Table 18 – Existing coal terminals in Indonesia .............................................................................64
Table 19 – Coal mining companies in Indonesia by permits, March 2015 ......................................66
Table 20 – CNC status of IUP by announcements, 20110630-20160104........................................81
Table 21 – Problems of Non-CNC IUPs by category and regions, 20140203 .................................82
Table 22 – Clean and Clear IUPs by province, 2014 – April 2016..................................................84
Table 23 – Coal Domestic Market Obligations in Indonesia, 2010-2015........................................85
Table 24 – Coal Domestic Market Obligations in Indonesia, by CCoW and KP/IUP
companies, 20100419-20150427 (mt) .....................................................................87
Table 25 – Overlay of IUP, COW, and PKP2B with Forest Area Map and IPPKH.........................89
Table 26 – IUP within conservation forests in 12 provinces, 2014-2015 ........................................89
Table 27 – The First Generation CCoW Companies: The dates, area, and resources/reserves.........93
Table 28 – The second generation of CCoW Companies: 17 of 19.................................................93
Table 29 – Coal produced from Kalimantan, 1997-2000 (1000 ton)...............................................94
Table 30 – The third generation of CCoW Companies: 106 of 114 ................................................95
Table 31 – Coal production from CCoW companies, 2005-2012 (1,000 ton) .................................97
Table 32 – Financial profile of 3 direct subsidiaries of Tata Power on coal business in
Indonesia, 2015q1 (₹ crore)...................................................................................101
Table 33 – Subsidiaries of Tata Power related with coal mining business in Indonesia, 2015q1
(₹ crore)................................................................................................................101
Table 34 – Tata Power companies in Indonesia, 2015..................................................................102
List of Figures
Figure 1 – Potential future global oil projects by average breakeven prices ......................................3
Figure 2 – Australian monthly thermal coal price, Jan. 1980 – July 2016 (US$/metric ton)............10
Figure 3 – Monthly coal prices from Australia, Colombia, South Africa, Jan. 1970 – July
2016 ($/mt).............................................................................................................10
Figure 4 – American weekly coal prices, 20080506-20160812 (US$)............................................11
Figure 5 – Various technologies implemented during power generation process ............................12
Figure 6 – Some chemical reactions in converting syngas..............................................................13
Figure 7 – Some routes of coal to chemicals from methane via syngas...........................................13
Figure 8 – Coal cycle and its derived products schematics, from liquid (CTL), to gas (CTG),
and chemicals (CTC) ..............................................................................................14
Figure 9 – Potential UCG in the UK, 2004.....................................................................................15
Figure 10 – Kincardine UGC project area of interest, 20141105 ....................................................17
Figure 11 – Kincardine UCG licenses in the Firth of Forth, 20150402. ..........................................18
Figure 12 – Kincardine area of interest in Midland Valley of Scotland, 20141105 .........................19
Figure 13 – Coalmines in British Columbia, Canada......................................................................20
Figure 14 – Selected significant climate anomalies and events, July 2016......................................21
Figure 15 – Earth's Annual Global Mean Energy Budget, July 1987 – Dec. 1988..........................22
Figure 16 – Earth’s Global Energy Budget, March 2000 – March 2004 .........................................22
Figure 17 – Monthly mean atmospheric carbon dioxide at Mauna Loa Observatory, Hawaii,
March 1958 – July 2016 (ppm) ...............................................................................26
Figure 18 – Oxygen transport capability of different MeO/Me systems..........................................27
Figure 19 – The effective aquifuge in Beizao Coalmine.................................................................32
12. Coal Mining Business in Indonesia – xi
Figure 20 – TBU Underwater coal mining in The Baltic Union......................................................33
Figure 21 – TBU Coal Island.........................................................................................................34
Figure 22 – TBU Sandisle structure...............................................................................................34
Figure 23 – Coal mines in Nova Scotia, Canada ............................................................................36
Figure 24 – Donkin coal resource block.........................................................................................36
Figure 25 – Solway Firth, Irish Sea, UK ........................................................................................39
Figure 26 – The map of Tynemouth-Boldon-Sunderland, NE England...........................................41
Figure 27 – Deep coal mining closures in the UK, 2010-2015........................................................43
Figure 28 – Deep coal mining closures in the UK, 1960-1969........................................................43
Figure 29 – Onshore coal distribution in the UK by depth, 2014....................................................44
Figure 30 – CBM Basins in Indonesia............................................................................................47
Figure 31 – Coal bed methane (CBM) resources in Indonesia, 2010 ..............................................48
Figure 32 – CBM PSC terms in Indonesia .....................................................................................48
Figure 33 – Some CBM PSCs in East Kalimantan .........................................................................51
Figure 34 – CBM basin in South Sumatera, Nov. 2011..................................................................54
Figure 35 – Tanjung Enim CBM PSC............................................................................................55
Figure 36 – Muralim CBM PSC ....................................................................................................56
Figure 37 – Sangatta West CBM PSC............................................................................................58
Figure 38 – The CBM PSCs of NuEnergy in Sumatera..................................................................59
Figure 39 – Gasification-based system concepts ............................................................................61
Figure 40 – Gasification chemistry ................................................................................................61
Figure 41 – Coal distribution in Indonesia by calory class, 2014....................................................62
Figure 42 – Supply and export of Indonesian coal, 1997-2014.......................................................63
Figure 43 – Export share over coal production in top producing countries .....................................63
Figure 44 – Coal seaports in Indonesia, 2015.................................................................................65
Figure 45 – UK banks involvement in Indonesian coal companies.................................................66
Figure 46 – Mining permits in Indonesia, 20140203 ......................................................................67
Figure 47 – Mining problems in Indonesia, 20140203 ...................................................................80
Figure 48 – JORC's general relationship between exploration results, mineral resources, and
ore reserves.............................................................................................................80
Figure 49 – Problems of Non-Clean & Clear Status of IUPs classified and mapped .......................83
Figure 50 – Adding value to the coal by implementing clean coal technology................................85
Figure 51 – Coal DMO mechanism in Indonesia............................................................................86
Figure 52 – Monitoring and reporting system on the implementation of coal DMO mechanism
in Indonesia ............................................................................................................87
Figure 53 – Clean & Clear Status of IUPs, May 2011 – April 2016................................................90
Figure 54 – The mechanics of $600m structure finance (fixed rate note) of IndoCoal in 2005......106
Figure 55 – The mechanics of unrated $900m structured export notes (FRN) of IndoCoal in
2006 .....................................................................................................................106