Web notes; Coal & Energy for Indonesia.

On the 16th August 2021, Tambang magazine held a webinar “Tambang dan Energi Bakti untuk Negeri” [mining and energy for Indonesia]. The webinar was held in Indonesia and attended by around 450 people. The speaker’s presentations outlined the standard government outlook of the coal industry, that was followed by generous discussions wherein the speakers reflected on some of the more realistic practical outlooks. I apologize for any errors or omissions that may appear in these short notes.

Overall, the Mines Department and coal mining industry are working well together for their mutual benefit, and advancement of the nation. Industry continues to urge the government to support a wider range of exploration and mining business opportunities. There is still much more to be done.

Atep A. Rofiq of Majala Tambang set the scene for this webinar, against a backdrop Covid and the important role Indonesia’s mining and energy industry.

Singgih Widagdo (Berau Coal) undertook the moderator’s role, and reminded us of the evolution of the mining industry. Geological surveys, exploration and mining started with the taking over of the colonial mining industry, and thereafter built into a world class mining industry that has evolved great domestic human resources, support industries and expanded into downstream industries.

Prof. Irwandy Arif delivered the ESDM presentation on behalf of the Minister. Numerous clear slides on the positive performance of the Migas, Listrik and Mining sectors, the governments stimulus program, road map for down-streaming (smelters etc), coal rail expansion etc. This presentation added some further emphases on programs to develop the small scale / local mining sector. The ESDM has a broad and diversified plan for reducing greenhouse gases, while maintaining reliable and cheap energy supply to industry and the people.

Suryo Eko (PT. Bukit Asam) presented “Proyek coal to DME dan strategi PTBA menuju transformasi menjadi perusahaan energi kelas dunia” [The coal to DME project and PTBA's strategy towards transformation into a world-class energy company”]. This was like a publicity pitch, where PT.BA plans to expand the coal rail system to allow for greater production, and to develop mine mouth power plants. The plan to develop a coal based chemical industry seems to be justified by the national goal to reduce LNG imports.

Frans Kesuma (Pama) outlined the business of Pama as a diversified company operating as a mining company, coal owner & trading company, energy provider, mineral business and other businesses. Pama’s contribution to the economy, employment, good mining policy, and community development reflected a mature responsible and modern company, with considerable care for its employees. Management is driven by a sound business outlook.

Agung Satya Wiguna (PT.Linknet Tbk) promoted this company as a internet provider to the public households, and to the mining industry. The diverse role computer connectivity plays in the development of the Mines Department and for mining companies was very well presented. ?

Discussion & comment.

The reality of developing the PT. BA DME program is slim, as the government is not willing to fund the US$ 2.1 billion DME program, and private investors are not forthcoming. The fundamental blockage seems the be the high up-front capital, slow return on capital, and excessive operating costs against a global long-term outlook for low LNG prices. The Carbon capture program is delayed due to lack of technical factors, capital etc. PT. BA is reducing its carbon footprint through revegetation and more doable programs.

Pama is looking at diversification into various minerals with the underlying motive to invest in what may be a long-term profitable business, such as copper, but less inclined to investigate monazite etc.

The Governments on-line One Stop Service [OSS] is not yet optimal, and under pressure from the program to get the thousands of diverse small / local miners to be registered and verified, plus some slowness in connectivity between the Mines Department and BKPM. This is further delayed by the uncertainty of the contents in the coming implementing regulations associated with law 3/2020.

The smelter regulations are constantly being reviewed and updated. One issue is the recognition of limited Ni saprolite reserves, and underutilization of limonite reserves. There are significant Ni resources yet to be turned into reserves through consideration of forestry, land accessibility and smelter technology factors.

Mines Department reviews of other commodities that have great potential, (bauxite, dolomite, monazite etc) is being researched.

Good mining practice, care for the Environment and the well being of industry Personnel & communities are key factors in the Nation moving forwards.?