low rank coal utilization in indonesia

MINISTRY OF ENERGY AND MINERAL RESOURCES

DIRECTORATE GENERAL OF MINERAL AND COAL

“LOW RANK COAL UTILIZATION IN INDONESIA”“LOW RANK COAL UTILIZATION IN INDONESIA”LOW RANK COAL UTILIZATION IN INDONESIALOW RANK COAL UTILIZATION IN INDONESIA

Presented byPresented by ::THAMRIN SIHITETHAMRIN SIHITE

DirectorDirector General of Mineral and General of Mineral and CoalCoal

CLEAN COAL DAY IN JAPAN 2012 INTERNATIONAL SYMPOSIUMCLEAN COAL DAY IN JAPAN 2012 INTERNATIONAL SYMPOSIUMTokyo, September 4-5, 2012

MAIN TOPICSMAIN TOPICS

I. CURRENT CONDITION

II. POTENCY OF LOW LOW RANK COAL

III. LOW RANK COAL UTILIZATION

IV. INVESTMENT OPPORTUNITIES

V. CONCLUDING REMARKS

CURRENT CONDITION

1. Resources allocation for coal production is imbalance. Largely coal comes from Kalimantan and g ythe rest comes from Sumatera, particularly South Sumatera. On the contrary, the coal potential in SSumatra is more than the coal in Kalimantan.

2. Procentage of domestic coal demand is still l ti l l hil l t i i i ti lrelatively low, while coal export is rising continously

3. Not all Indonesian coal qualities can be consumed by domestic demandby domestic demand

4. Coal is still main concerned as a commodity rather than as a source of energygy

5. Infrastructure limitations in several areas

COAL POLICY

Implement priority fulfillment of mineral and coal for domestic needs

Provide certainty and transparency (Mining Law regulationsupporting, sanction violations of the provisions, etc.)

Implement priority fulfillment of mineral and coal for domestic needs

SIX

supporting, sanction violations of the provisions, etc.)

Improving supervision on good mining practiceDIRECTION

Increasing investment and state revenues from mining

Encourage the development of value-added products (i.e. processing,local content, local expenditure, upgrading brown coal, labor and CSR)

Maintain environmental sustainability through environmental management and monitoring, including the reclamation and post-mining

INDONESIA LOW RANK COAL MANAGEMENT

OLOW RANK COAL

INDONESIAN COAL BEARING FORMATIONSPOTENCY OF LOW RANK COAL

There are two major coal bearing formations by geological age namely Paleogene and Neogene.

B h i K li hil i S l N F iBoth ages are present in Kalimantan, while in Sumatra mostly Neogene Formation.

Resource : Geological Agency, 2011

INDONESIA COAL RESOURCE AND RESERVE

Coal Resources Coal ReservesMillion Tons Million

Tons

Hypothetic Inferred Indicated Measured Probable Proved

Milli TMillion Tons Million TonsProved reserve

Probable reserve

Source : Geological Agency, 2011

INDONESIAN COAL DISTRIBUTIONS BASED ON CALORIFIC VALUE

Low – Medium Calorie result from Neogene Formation, while Medium – High Calorie result from Paleogene Formation Very High Calorie result from IntrusionFormation. Very High Calorie result from Intrusion.

Resource : Geological Agency, 2011

INDONESIAN COAL DISTRIBUTIONS BASED ON CALORIFIC VALUE

COAL RESERVES BASED ON CALORIFIC VALUE AND PROVINCES 2011

LOW RANK COAL UTILIZATION (Direct Use)

THE NEEDS OF DOMESTIC USERS 2011

MILLION

COAL QUALITY REQUIRED BY DOMESTIC DEMAND

MILLION(POWER PLANT)

Most of Indonesia’s coal reserve is categorized as medium rank coal (5100 – 6100 kcal/kg, ADB). This type of coal should be prioritized to electricity, particularly PLN as the primary coal user since it is suitable to the needs of PLN’s coal ranged between 4000 – 5200 kcal/kg (GAR) or equivalentit is suitable to the needs of PLN s coal ranged between 4000 5200 kcal/kg (GAR) or equivalent to 5100 – 6100 kcal/kg (ADB)

Domestic Consumption of Coal (2008-2012)

Other Industries

Briquette

Textile

Pulp & Paper

M t lMetalurgy

Cement

Power Plant

Note:2012 * = data semester I

LOW RANK COAL UTILIZATION (Indirect Use)

o Mining infrastructure developments (mainly in Kalimantan and Sumatra)

INVESTMENT OPPORTUNITIES

o Mining infrastructure developments (mainly in Kalimantan and Sumatra)o New application of mining through bidding process in new areas of mining (IUP and

IUPK)o Development of mining and smelter (energy) as well as development of processingp g ( gy) p p g

and refining (Added Value of Mineral)o Cooperation in underground coal mining developmento Development of upstream-downstream mineral and coal based on industrial linkagesp p go Utilization of law rank coal (LRC) Coal liquafaction Coal gasification Mine-mouth power plant

MEMR proposed Coal liquefaction and gasification business in (South Kalimantan, East Kalimantan, Central Kalimantan, Jambi, Bengkulu, South Sumatra, West Sumatra, Riau, NAD) as a one of business sector to obtain income tax facilities in certain field and business.

Incentive for underground mining development Incentive for underground mining development

OPPORTUNITIES OF COAL SECTOR IN JAVA CORRIDOR

“Boosting national industry and service"

10000 MW stage1PLTU 10000 MW stage IIPLTA & PLTP 10000 WW stage IIOIL REFINERY

Infrastructure:C G1.Coal Generated Electricity

•Development of Steam Power Plant 10.000 MW Stage I and II

OPPORTUNITIES OF COAL SECTOR IN SUMATERA CORRIDOR

Added Value for Mineral and Coal Sector• Coal : Developing petrochemical industry by constructing syngas

i li C l G ifi ti d C l U di i P dpipeline; Coal Gasification and Coal Upgrading in Pendopo.• Mineral: Constructing Processing Facility for gold and silver in

SouthTapanuli ; constructing concentrate factory and mining infrastructure for Zinc dan Lead in Dairi Regencyg y

Necessary Key Infrastructure1.Infrastructure on Electricity related to mineral and coal

• Steam mine-mouth power plant in PLTU Banjarsari (Lahat, Sumsel);p p j ( , );PLTU Sumsel di Muara Enim, PLTU Tj. Enim, PLTU Tarahan(Lampung Selatan) and PLTU Peranap (Indragiri Hulu, Riau).Electricity installment for gold and silver processing in South Tapanuli,Sumut;

2.Infrastructure on Coal• Rail way and port

- Construction of new railway Tj. Enim – Srengsem (Lampung)Improving capacity of railway Tj Enim Lampung and Tj Enim- Improving capacity of railway Tj. Enim – Lampung and Tj. Enim -

Kertapati- Rail wayMuara Enim – Tj. Carat- Construction of Tj. Carat Port (Lampung)

• Construction of Kuala Tanjung Dockj g

OPPORTUNITIES OF COAL SECTOR IN KALIMANTAN CORRIDOR

Development Planning for Infrastructure, Transportation, Stockpiling, and Blending Kalimantan Corridor

Added Value of Coal• Acceleration of Operation Production in Central Kalimantan• Coal Processing in Tanjung Redep, Bulungan , and Batu Licin’

D l t Pl i f C l Li f ti i E t K li t• Development Planning of Coal Liquefaction in East Kalimantan

II f t tf t tIInfrastructurenfrastructure1. Coal Infrastructure1. Coal Infrastructure

•• Railway Railway PPuurrukukcahu cahu -- BangkuangBangkuang•• Road Expantion of Road Expantion of Kelanis, Central Kalimantan Kelanis, Central Kalimantan

22 Electicity InfrastuctureElecticity Infrastucture2.2.Electicity InfrastuctureElecticity Infrastucture•• Construction of gas power plan Construction of gas power plan (1x120MW)(1x120MW)•• Construction of coal mine mouth power plant Construction of coal mine mouth power plant Tabalong Tabalong

(2x30MW)(2x30MW)•• Coal Coal Power Plant (2.160MW), TPower Plant (2.160MW), Transmission ransmission (5.346(5.346 km), km),

SubSub--station (1.720MVA), Distribution JTM (10.810station (1.720MVA), Distribution JTM (10.810 km), km), Distribution JTR (9.907km), Distribution Station (898MVA)Distribution JTR (9.907km), Distribution Station (898MVA)

CONCLUDING REMARKSCONCLUDING REMARKS1. In according to the law on mineral and coal the Government has to

t l l l f d ti d i d ti ticontrol level of production and increase domestic consumption. Considering current condition, coal allocation for domestic uses should consider location of coal resources.

2. Controlling coal production is necessary to hold Kalimantan high rank coal production and increase South Sumatra low rank coal production. Infrastructure and transportation should be constructed to increaseInfrastructure and transportation should be constructed to increase Sumatra low rank coal production, and coal from this area is also suggested to be upgraded and converted into liquid.

3. Indonesian Mining Sector is truly still a great opportunity to Indonesia development. The foreign investment is one of the crucial factors for developing mining industry. In this matter, there is a need to increase international cooperation to develop mining investment, technology and manpower development. It is important to note that there are still a number of opportunities on mining development in Indonesia.u be o oppo u es o g de e op e do es a

Arigato GozaimashitaArigato Gozaimashitaggwww.djmbp.esdm.go.id