Investment across sectors and at the landscape level - the case of coal mining in           Kalimantan, Indonesia      Ahm...
Production is predicted to                 increase                                          700• Coal production has     ...
Most of the coal is exported               400Million tons               350       Approximately 60% of                   ...
But domestic use is driving Government national energy policy: increasing coal in the    national energy mix   Increased...
Coal reserves in Indonesia Sumatera and Kalimantan have the highest reserves                                             ...
Economic importance of                  coal mining 85% of national mining revenues comes from coal Approximately 35% of...
Coal mining in  Kalimantan• Multiplication of  large scale  operations since  2000• Mostly in East and  South Kalimantan  ...
Coal expansion             14                                                                          4,000              ...
Mining scars               THINKING beyond the canopy
Small scale miningSmall scale coal                 District              Mining rights                           Area (ha)...
Potential challengesSignificant potential for future deforestation: 3.2 million ha of land allocate for large scale explo...
Concluding remarks Coal mining is a growing sector in Indonesia, but have    the potential to be a major driver of defore...
www.cifor.org                THINKING beyond the canopy
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Seminar 13 Mar 2013 - Session 4 - Investment accross sector_ by ADermawan

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Indonesia has grown to become the world’s largest exporter of steam coal. Its production has increased from 77 million tons in 2000 to 353 million tons in 2011. The Indonesian part of Borneo Island (Kalimantan) has become the main coal producing center in the country. Between 2000 and 2011, coal mining concessions in Kalimantan expanded from 1.5 million ha to about 13 million hectares. So far, the extent of forest loss because of coal mining has been limited and is much lower than that caused by oil palm. However, this is largely because small scale mining concessions, which form the majority of the mining concession area allocated, are yet to be activated. Because the legal framework encourages expansion and growth in coal production, the pressure on forest may increase if small mining concessions become fully operational. This may happen if the demand for coal in China and India, currently the main driving force behind the growth of coal mining in Indonesia, expands as predicted. Domestically, the privileged treatment of the coal mining sector as a strategic part of Indonesia’s long term development plan is a potential threat to forests as well. New policies limiting the intensity of coal mining, seeking to add value, and limit environmental damage are needed to guard against long term environmental and social damage.

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Seminar 13 Mar 2013 - Session 4 - Investment accross sector_ by ADermawan

  1. 1. Investment across sectors and at the landscape level - the case of coal mining in Kalimantan, Indonesia Ahmad Dermawan, David Gaveau, Erik Meijaard, Krystof ObidzinskiTHINKING beyond the canopy Bogor, 13 March 2013
  2. 2. Production is predicted to increase 700• Coal production has Million tons increased by triple in 600 2004-2011 500• Predicted to double in 400 2018 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012f 2013f 2014f 2015f 2016f 2017f Sources: MEMR and BMI THINKING beyond the canopy
  3. 3. Most of the coal is exported 400Million tons 350 Approximately 60% of Indonesia’s exports go to 300 China and India 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 2011 Production ExportSource: Ministry of Energy and Mineral Resources THINKING beyond the canopy
  4. 4. But domestic use is driving Government national energy policy: increasing coal in the national energy mix Increased demand from power sector, esp. for outer islands Energy mix 2006 Energy mix 2025 Geothermal, Biofuel, 5% Geothermal, 5% Hydro, 3% 1% Hydro, 5% Oil, 20% Gas, 29% Oil, 52% Gas, 32% Coal, 33% Coal, 15% THINKING beyond the canopy
  5. 5. Coal reserves in Indonesia Sumatera and Kalimantan have the highest reserves 2.1 MT 52.3 BT 52.5 BT 128.6 MT 233.1 MT 14.2 MTSource: Ministry of Energy and Mineral Resources 2012 THINKING beyond the canopy
  6. 6. Economic importance of coal mining 85% of national mining revenues comes from coal Approximately 35% of East Kalimantan’s GRDP comes from coal 4% 2% 4% 6% 3% 8% 0% 23% 50% Agriculture Mining and quarrying Manufacturing industries Electricity, gas and water supply Construction Trade, hotels and restaurant Transportation and communication Financial, leasing and business services Services THINKING beyond the canopy
  7. 7. Coal mining in Kalimantan• Multiplication of large scale operations since 2000• Mostly in East and South Kalimantan THINKING beyond the canopy
  8. 8. Coal expansion 14 4,000 Number of permitsMillion ha 3,500 12 3,000 10 2,500 8 2,000 6 1,500 4 1,000 2 500 0 0 Cumulative area (ha) Permits (cumulative) THINKING beyond the canopy
  9. 9. Mining scars THINKING beyond the canopy
  10. 10. Small scale miningSmall scale coal District Mining rights Area (ha)mining permits Malinau 7 11,114 Nunukan 22 70,112issued by Regents Tanatidung 2 5,000are understudied Tarakan Bulungan 33 136,153 Berau 68 224,060 Bontang Samarinda 76 27,556 Balikpapan Kutai Kartanegara 687 1,237,374 Kutai Timur 38 670,549 Kutai Barat 138 395,486 Penajam Paser Utara 36 86,307 Pasir 73 248,978Source: LITBANG Kompas, JATAM, Greenpeace Total 1,180 3,112,690 THINKING beyond the canopy
  11. 11. Potential challengesSignificant potential for future deforestation: 3.2 million ha of land allocate for large scale exploration and exploitation in East & South Kalimantan 40% of this is forested (1.3 million ha) Large portion of small scale permits in forested areas as well (since 2010 no new small scale permits issued)Mining get priority over other land uses: Permenhut No.P.18/Menhut-II/2011 on Guidelines for the use of forest estate for mining Permenhut No.P.14/Menhut-II/2011 on timber utilization permits (IPK) for mining companies Large new coal concessions (hundreds of 000s of ha) as 15- 20% can be clear-cut (timber) for mine development THINKING beyond the canopy
  12. 12. Concluding remarks Coal mining is a growing sector in Indonesia, but have the potential to be a major driver of deforestation Demand for coal is rising, driven by growing demand for energy in the Asia-Pacific as well as from domestic consumers Indonesia is stepping up production and export; it’s getting jobs but it’s loosing revenues and forests Major large scale expansion plans is underway, but small scale expansion is often understudied. THINKING beyond the canopy
  13. 13. www.cifor.org THINKING beyond the canopy

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