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INDONESIA 2016

Best of Germany 2014 - Mining Equipment and Mining Technology

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2 • Coal Age Indonesia | October 2016 Declining exports and foreign investment plus pressure from anti-mining lobbyists have spurred the government of the Republic of Indonesia to reconsider, retract or rescind, redraft and possibly implement new regulations and policies. This week's World Bank revelation that Indonesia's GDP growth is unlikely to go beyond 6% by 2018 has everyone rethinking! Dwindling geothermal exploration (and in fact any other mineral exploration) and overlapping local, state and federal regulations can and have impeded any sig- nificant growth in the exploration of resources to meet Indonesia's economic growth and electricity demand. Progress in renewable energy resources is far too slow to meet such demand. The Indonesian government wants to add 35,000MW to the nation's energy capacity by 2019 and there is no question that coal is a definite requirement to achieve such a goal. Some companies have been given government approval to produce more coal and GEAR (Golden Energy) is one such recipient of this approval, while thermal coal producer Geo Resources has found more reserves; Cokal reserves at BBM are confirmed to be highly metallurgical coal; and Blackgold has announced its coal reserves in Riau. Coal miners wanting to diversify their business so as to offset coal price reductions have set their sights on becoming power generators and power plant developers. Adaro is the biggest example here followed by Tambang Batubara. Adaro is, in fact, the driver for the $4bn Batang power plant proj- ect in Central Java. Construction of this power plant is soon to commence following the successful financing received by the BPI consortium, which includes Adaro. Recent share price increases in listed coal mining companies on the Jakarta Exchange is a welcome sign but some analysts remain cautious, particularly as China's economic slowdown continues and whilst the global economy remains volatile. Nevertheless, China's slowdown and the closure of some 1000 coal mines so as to adhere to the statutory working days in coal mines, actually means a boost for coal imports. China may well be looking for more coal from both Indonesia and Australia in the coming year. Another boost for the Indonesian coal business is being driven by Coal India's (CIL) asset shopping in Indonesia. CIL is eyeing several deposits and will over time acquire such assets via a government to government arrange- ment. Acquisition of such assets will reduce CIL's reliance on coal imports. Reduced exploration and reduced production means a softening in the purchase of mining equipment and services in this region. A recent report on the global mining machinery market indicated the potential for growth in mining equipment sales in the Asia Pacific region but this is predicated on equipment purchases in the metals mining industry, more specifically in the iron ore and bauxite camps and not so in the coal industry. Stationary surface mining equipment litters the coal sites while most servicing of such equipment is done in-house. Improved clean coal technologies and innovations may see some growth in Indonesia. Recent conferences conducted by Mining Media on coal and mining in Indonesia have provided insight, opportunities and prospective resolutions to issues in infrastructure to mine, as well as technologies that can assist in optimising mine production. Meantime, coal mining continues in Indonesia and the industry is optimistic. From the Editor www.mining-media.com E&MJ/Coal Age Indonesia® Suite 1, G 02/685 Burke Rd., Camberwell, Victoria, 3124, Australia Phone: +61 3 90061742 Editorial director - Steve Fiscor, sfiscor@mining-media.com Europe - Simon Walker, simon.iets@btinternet.com North America - Russ Carter, russ.carter.emj@gmail.com Latin America - Oscar Martinez, omartin1@ctcinternet.cl South Africa - Gavin du Venage, gavinduvenage@gmail.com SALES Publisher - Lanita Idrus, lidrus@mining-media.com North America - Victor Matteucci, vmatteucci@mining-media.com Germany, Austria, Switzerland - Gerd Strasmann, strasmannmedia@t-online.de Rest of Europe - Colm Barry, colm.barry@telia.com - Jeff Draycott, jeff.draycott@WOMPint.com Japan - Masao Ishiguro, Ishiguro@irm.jp Indonesia -Dimas Abdillah, dabdillah@mining-media.com Mining Media International 8751 East Hampden, Suite B-1 Denver, Colorado 80231, U.S.A. Phone: +1 303-283-0640 Fax: +1 303-283-0641 Publisher - Peter Johnson, pjohnson@mining-media.com Subscriptions - Tanna Holzer, tholzer@mining-media.com Accounting - Lorraine Mestas, lmestas@mining-media.com E&MJ/Coal Age Indonesia® is published once per year by Mining Media International. Every endeavour is made to ensure that the contents are correct at time of publication. The Publisher and Editors do not endorse the opinions expressed in the magazine. Editorial advice is non-spe- cific and readers are advised to seek professional advice for specific issues. Images and written material submitted for publication are sent at the owners risk and while every care is taken, E&MJ/Coal Age Indonesia® does not accept liability for loss or damage. E&MJ/Coal Age Indonesia® reserves the right to modify editorial and advertisement content. The contents may not be reproduced in whole or in part without the written permission of the publisher. ISSN: 1832-7966. Indonesia Lanita Ldrus State of Power

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