gultom guska, directorate general of mineral and coal - indonesian coal mining policy
DESCRIPTION
Gultom Guska, Directorate General of Mineral and Coal delivered this presentation at Kalimantan Coal 2014 in Balikpapan Indonesia. This event brings together 120+ senior executives, and decision makers from government, mining, infrastructure, shipping and supply sectors to discuss new policies and strategies for tackling the current and emerging issues within the burgeoning Kalimantan coal sector. Visit the website to find out more: http://bit.ly/KalimantanCoal2014TRANSCRIPT
INDONESIAN COAL MINING POLICY
DIRECTORATE OF COAL BUSINESS DEVELOPMENT
DIRECTORATE GENERAL OF MINERAL AND COAL
THE 3 RD ANNUAL KALIMANTAN COAL Balik Papan, Novotel Hotel September 2nd, 2014
By : Gultom Guska
OUTLINE
I. STRATEGIC ISSUES/CURRENT
CONDITION
II. NEW REGULATION OF COAL MINING
III. EFFORT FOR MANAGE COAL
EXPORT DATA
IV.CLOSING REMARK
STRATEGIC ISSUES
1. Coal production tend to sharply increase each year. Realization of production
in 2013 : 431 M Tons, its about 80% still dominated by export. The Domestic
consumptions is about 72 M Tons. The role of coal is still gained government
revenue ( in 2013 from Mineral & Coal Rp. 145 Trilyun compare from Oil & Gas
Rp. 257 Trilyun) rather than coal as energy sources. In the future the role of
coal as energy source will be crucial factor. In line with this, the control
production will be very important through the regulations of production control.
2. The domestic demand of electricity tend to increase for supporting the growth
of economic 6 % annually, and the coal utilisation in national energy mix for
replace of oil will be increased to 60 %. In the future the domestic demand on
coal also will be increase, in estimate in 2018 the demand of coal from
electricity 109.1 M Tons. The existing demand righ now for electricity (PLN+IPP)
in Year 2012: 53 M Tons and in 2013: 66 M Ton, in 2014: 77 M Tons. The coal
demand for support 3 GW growth annually is about 15 M Tons – 25 M Tons.
Install capacity of National Electricity 50.655 MW (71 % PLN, IPP 20 %, PPU 4
% and IO non BBM 5 %)
STRATEGIC ISSUES 3. In line with the strategy for maintain emissions and high effisiencies to generate
electricity from Coal, the National Electric Company will develop super critical
technology with effisiencies 35 – 40 % in Cirebon 1 x 660 MW, Paiton 3 : 1 x
815 MW. Year 2017 Ultra Super Critical with effisiencies 43 % will built in
Central Java IPP USC 2 x 1000 MW, Bekasi USC 2 x 600 MW, Indramayu # 2
USC 1000 MW. There are plan to built IGCC 1000 MW.
4. The government strongly accomodate with the investors to develop of utilization
lignite coal to liquefactions,up grading, gasification, mine mouth power plant,
blending facility, and also for building a coal hauling, special port for coal (jetty)
and special coal hauling road by train or trucking and coal terminal for export
and domestic.
5. The scheme of Mine Mouth Power Plant has been given the special coal price
(Cost + Margin). The government has already issuance a regulations to
enhance and faster the develop of Mine Mouth Power Plant : a) Ministry Decree
No.10/2014 regarding Mechanism of Stipulated Coal Pricing for Mine Mouth
Power Plant (April 4 th, Year 2014). b) Regulations of The Director General
Concerning Cost Of Productions for Mine Mouth Power Plant Coal Price
479.K/30/DJB/2014 (30 th Mei, Year 2014).
STRATEGIC ISSUES
6. In term of optimalizations of Government Revenue from royalty (Non Tax Revenue)
there have a some actions which could be done such as : Reconciliations of IUP,
productions controls for budget & plan of productions annually for IUP/PKP2B, collect
pre payment royalties before shiping coal. Implementations of Exporter Recomendation
(ET) and the obiligations of surveyor superintending for listed in Directorate General
Mineral and Coal (Regulations of the Directorate General Concerning Coal Surveyor
(No.481.K/30/DJB/2014, Mei 30 th Year 2014). Base on recomendations and
coordinations intra department with the Commisions of Eradictions Coruptions (KPK).
Very High /Antracit ( > 7100 kal/gr ) Medium / SubBituminus ( 5100 - 6100 kal/g) High /Bituminus ( 6100 - 7100 kal/gr ) Low /Lignite ( < 5100 kal/gr) .
DISTRIBUTION OF INDONESIA COAL
Source: Geological Agency, 2011
TOTAL COAL RESERVE 28.17 BILLION TONS
Lignite (29%) SubBituminus (60%)
Bituminus (11%)
TOTAL COAL RESOURCE 161.34 BILLION TONS
Lignite (20%) SubBituminus (66%)
Bituminus (14%)
Total Lignite: 21.3% Sub-bit: 13.6% Bituminus: 65.1%
INDONESIAN COAL PRODUCTION, EXPORT, DMO AND COAL PRICES
Coal price affecting Indonesian coal production and export
Coal production and export growth by 14 % per year
Domestic coal demand growth by 12 % per year (domestic demand is priority before export)
April ‘13 to April ‘14: production growth by 3%, domestic (dmo+ trader) 27% and export 0.2 %
New regulation will be coal production control to fulfill long-term domestic coal demand
CU
RR
EN
T
CO
ND
ITIO
N
Note: ICPR is decided by following mechanism: 1.averaging 4 indexes ( NEX and GCNC as a references for international coal price; ICI-1 dan Platts-1 as references for Indonesian coal price) to obtain a CPR 2.On the basis of CPR Calculate coal price marker by certain formula 3.Results of 2 is to calculate other coal base on Calorie,Moisture,Ash & Sulfur content
Note: calculated in 6322 kkal/kg GAR
COAL PRICE REFERENCES
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
180.00
200.00H
arga
(U
S$/t
on
)
HBA
ICI-1
NEX
GC
PLATTS-1
Jun’13 USD 84.87/ton
Jul’13 USD 81.69/ton
Agt’13 USD 76.70/ton
Sep’13 USD 76.89/ton
Okt’13 USD 76,61/ton
Nop’13 USD 78,13/ton
Des’13 USD 80.31/ton
Jan’14 USD 81.90/ton
Feb’14 USD 80.44/ton
Mar’14 USD 77.01/ton
Apr’14 USD 74.81/ton
A such impact : decreasing
revenue, terminations of
employment, cost effisiensi,
decrease of government revenue;
the production target not
achieved, diminishing of
exploration cost, diminishing of
subcont ect---
Mei’14 USD 73.60/ton
Jun’14 USD 73.64/ton
Jul’14 USD 72.45/ton
Agt’14 USD 70.29
Stipulated of Export Recomendation Regulations (Permendag
No.39/M-DAG/PER/7/2014) pospone until Okt 2014;
Directorate General Degree No.714.K/30/DJB/2014,
mechanism of export recommendations for Ccow,IUPOP,IUP
Trader) and Promote of Coal Commodities Bourse,
LAW NO. 4/2009
Article 6 Paragraph 1 K
GR NO. 23/2010 (Feb 1, 2010)
Article 85
Minister Regulation No. 17/2010 (Sept
23, 2010)
Regulation of the Director
General No. 515/2011
concerning Coal Price Formula
March 24, 2011)
Regulation of the
Director General
No.
644/2013 as
amendment to
999.K/2011
Concerning
Adjustment Cost
(March 21, 2013)
Regulation of the
Director General
concerning Coal with
Specific Type and
Purpose
No.480.K/30/DJB/2014
(30 Mei 2014)
Regulation of the
Directorat General
concerning
Concerning Coal
Surveyor
No.481.K/30/DJB/2
014
(30 Mei 2014)
Decision of the Director
General concerning
Monthly Coal Price
HBA HPB Marker &
others
HPB
Coking Coal
Decree of the
Minister No.
0617/2011
Concerning Coal
Price for PLN
(March 3, 2011)
Hard Coking Semi Soft Coking Pulverized Coal Injection
Notes:
PKP2B is regulated in PKP2B Contract Article 12 / 13
Article 11 Paragraph 4 Article 13 Paragraph 4 Article 21 Paragraph 4
Article 12 Paragraph 5
Ministry Decree
No.10/2014 regarding
Mechanism of
Stipulated Coal Pricing
for Mine Mouth Coal
Power Plant
(April 4th,2014)
Article 21 Paragraph 4
COAL PRICING POLICY INSTRUMENT SCHEME
Regulation of the Director
General concerning Cost of
Productions for Mine Mouth
Coal Power Plant Pricing
2014
(30 Mei 2014)
IMPLEMENT PRIORITY FULFILLMENT OF COAL FOR DOMESTIC NEEDS
Sources: Decree of the MEMR DMO Determination
2010 - 2014 DMO is only 20 – 25 % of Total National Production
Quality for domestic market : 4.000 – 6.500 Kal/Kg GAR
2015 – 2055 DMO annual growth 8,3 % base on long term plan of coal power plant demand
about 3 GW/years need 15 – 25 Millon ton /year for coal.
CU
RR
EN
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ON
DIT
ION
Low Rank : ≤ 5100 kkal/kg ADB-----------------< 4700 kkal/kg GAR
Medium Rank : > 5100 – 6100 kkal/kg ADB---4700 – 5700 kkal/kg GAR
High Rank > 6100 kkal/kg ADB-------------------≥ 5700 kkal/kg GAR
REALISATIONS OF PRODUCTIONS BASE ON CALORIFIC VALUE
(2011 – 2013)
Coal Consumption for Coal Power Plant (2012-2019
MillionTon)
Produksi dan
PenjualanRealisasi 2011 Realisasi 2012 Realisasi 2013
Produksi 353 386 421
- Kalori Rendah 8 34 37
- Kalori Sedang 251 223 243
- Kalori Tinggi 94 129 141
Ekspor 273 304 317
- Kalori Rendah 6 27 28
- Kalori Sedang 194 175 183
- Kalori Tinggi 73 102 106
Domestik 79 82 98
- Kalori Rendah 2 7 9
- Kalori Sedang 56 47 56
- Kalori Tinggi 21 28 33
Keterangan : Jutaan MT
Tahun 2011 Tahun 2012 Tahun 2013
kalori rendah 2,36% 8,82% 8,82%
kalori sedang 70,97% 57,71% 57,71%
kalori tinggi 26,66% 33,47% 33,47%
Million Ton
(MILLION TON
Decreasing Export
Increasing Domestic Demand
SKENARIO : FIX OF PRODUCTION SINCE YEAR 2015
TAHUN 2015 2020 2025 2030 2035 2040 2045 PRODUKSI 401 401 401 401 401 401 401 DOMESTIK 89 120 163 206 243 286 316 EKSPOR 312 281 238 195 158 115 85
SOLUTIONS FOR LOW RANK COAL
Gas Chemical Feedstock
DIRECT USE Power Plant
Industry
CONVERSION
LIQUEFACTION
GASIFICATION
Liquid
Clean Coal Technology
UPGRADING High Rank Coal
LOW RANK COAL
COKES
ACTIVE CARBON
COAL
CWM
COAL UTILIZATION
Supercritical Ultrasupercritical
IGCC
PROPOSAL OF COAL EXPORT TERMINAL PLAN IN INDONESIA
Kalimantan Timur 1.Teluk Balikpapan 2.Teluk Adang Bay 3.Teluk Berau 4.Teluk Maloy
Kalsel/Kalteng 1.Wilayah Tobaneo/Pulau laut, 2.Wilayah Sungai Danau, 3.Wilayah Batu Licin
Lampung Tarahan
Sumsel Tanjung Api Api
Jambi Sekitar Teluk Jambi
Bengkulu Pelabuhan Bengkulu
Sumatera Barat di Padang
Riau di kawasan Teluk Riau
Aceh di Aceh Selatan.
The New Insentive for Coal
Coal Price = Base coal price + escalation
1. COAL PRICE FOR MINE MOUTH COAL
POWER PLANT
2. COAL FOR SPECIFIC PURPOSED SUCH
AS UP GRADING, GASIFICATION,
LIQUEFACTIONS AND COAL SLURRY
Base coal price COST OF
PRODUCTIONS + 25%
MARGINS
The missing of coal export can occur due to the difference of collecting data system:
Statistic Indonesia uses data export from Customs;
Survey Report is a report submitted by the independent surveyor to the Director General of
Foreign Trade (DGFT);
Data released by the DGMC is submitted by the mining company or local government reports;
Efforts to prevent coal missing are :
1. prevent losses to the state revenue : The Royalties must be paid before
export and complete the export document with proved of royalties
payment document.
2. strengthen coordination among government institution: sampling witness
surveyor, online system data and reporting
3. recommendations of exporter companies from Ministry of Trade cq
Directorate Export base on evaluations and recommendations of
CCOW,IUPOP,IUP Trader from Ministry of Energy cg Directorate
General of Mineral and
throught Coal
EFFORT FOR MANAGE COAL EXPORT DATA BASE
CLOSING REMARK 1. Growth of production and export of coal was heavily influenced by the rise in coal
prices, to ensure long-term supply of domestic coal will be issued regulations
controlling coal production.
2. Government tried to restrict production by 2015 for better coal pricing (guarantee
supply & demand) and reduce of potensial losses in term of royalty and tax as a
source of government revenue, through an implementations of recommendations of
export (ET)
4. New regulation :
a. Ministry Decree No.10 /2014 regarding Mechanism of Stipulated Coal Pricing for Mine Mouth Coal Power Plant
(April 4th,2014)
b. Regulation of the Director General Mineral and Coal concerning Cost of Productions for Mine Mouth Coal Power Plant ‘ Coal
Pricing’ No.479 K/30/DJB/2014 (Mei 30 th 2014)
c. Regulation of the Director General Mineral and Coal concerning Coal with Specific Type and Purpose No.480.K/30/DJB/2014
(Mei 30 th 2014)
d. Regulation of the Director General Mineral and Coal concerning Coal Surveyor No.481.K/30/DJB/2014, (Mei 30th,201
e. Regulations of the Director General Mineral and Coal concernng mechanism of coal export recommendations No.714.K/30/
DJB/2014 ( August 12 nd 2014)
5. Strengthen coordination between government institution(Ministry of Trade, Custom and
Port Official), such as pay a royalties before shiping instructions and restriction on coal
export port also apply a surveyor witness to prevent illegal mining by providing data
on line system.
www.minerba.esdm.go.id