Coal production expected to increase

Coal Production Expected to Increase from South Kalimantan

Coal production in South Kalimantan has the potential to increase. South Kalimantan coal production by 2008, until the month of November reached 71.9 tons, of which 68.2 million tonnes were sold locally and internationally, 48.3 tons and 19.9 tons consecutively. In late 2008, production is expected to reach 78.5 million tons. Coal production in the region of South Kalimantan has the potential to increase in coming years. Apart from the vast coal reserves, several companies are currently in the stages of exploration and construction in the area 

This production is expected to keep rising in coming years, at least for the next five years. The 2009 production target was fixed at 86.8 million tonnes, while 2010 is estimated to reach 97.4 million tons, reaching a peak of 101.1 million tonnes in 2011. 2012 coal production is expected to slightly decline, totalling 96.4 million tons. 

There are currently 17 coal companies which are implementing the PKP2B model, with an extraction capacity of 2994 million tons. Current deposit of coal is estimated at 1390 million tons. Coal deposit for the whole of South Kalimantan is located at 1669 million tons.
The quality of South Kalimantan coal in general contains a calorific value of 3578 – 7298 kcal/kg; 0,04 – 2,94 % sulphur; 1-27,19% ash; 35 – 45,9% fix carbon; 38 – 70 HGI; 27,7 – 48,5% volatile matter; 3,54 – 24% inherent moister; and total moisture of 3,54 – 45%.

Beside its vast amount of coal, South Kalimantan is also rich in mineral reserves. According to data from the Center of Energy Resources, South Kalimantan has several mineral reserves including primary iron (9,9 million tonnes of ore and 5,97 million tonnes of metal), laterite iron (510 million tonnes of ore and 240,57 million tonnes of metal), laterite titanium (596,49 million tonnes of ore and 2,164 tonnes of metal), chrome (152 thousand tonnes of ore and 45,5 thousand tonnes of metal), primary gold (259,7 million tonnes of ore and 1,173 tonnes of metal), and placer gold (255,8 million tonnes of ore and 28,946 tonnes of metal

The Coal and Mining Law, approved during the House of Representatives plenary meeting on December 16, 2008 seeks to domestically increase mining commodity value. Mining companies are required to process their products domestically and at the same time prohibited from exporting raw material. This is aimed at increasing state revenue, opening new job opportunities, and increase public welfare.

“The Mining Law prohibits the export of raw material. This is a major change in our natural resources management, which is approved by the House of Representatives plenary meeting on December 16, 2008” explains the Minister of Energy and Mineral Resources, Purnomo Yusgiantoro during the explanation on “Mining Law: A New Era in Mining” in Jakarta on Wednesday (21/1).

The Minister further explains that for more than 30 years, we have been exporting raw mining products overseas, while at the same time importing processed products such as nickel, silver, and other products at a much higher price. This Mining Law aims to change this condition for the benefit of the nation.

The minister further explains that this task will not be an easy one, “this will only be accomplished through commitment and hard work”. The minister reminds that according to the 1945 Constitution, all natural reserves including mineral and coal as an un-renewable resource must be managed wisely to benefit the whole nation.

According to the minister, this Mining Law will provide a larger opportunity for Indonesia and its people to improve their natural resource management. “There have been a lot of debates, discussions, and agreements that we have been through before this law was issued. Of course not all ideas and opinions are accommodated in this law, but I am certain that several important and strategic aspects needed to carry out article 33 verse 3 of that 1945 Constitution is governed by this law. One of these aspects includes keeping a good investment climate”.

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