GOVERMENT POLICY TO DEVELOP LOW RANK COALGOVERMENT POLICY TO DEVELOP LOW RANK COAL

Clean Coal Day 2013 International Symposium “Change for Clean Coal Business & Sustainable Coal Supply – Japan Coal Energy Center (JCOAL)

Tokyo, on September 5 th, 2013

ByGultom Gushka

Deputy Directors Of Coal Business Enterprises – Divisions of Productions d M k ti S i i f C land Marketing Supervisions of Coal

DIRECTORATE GENERAL OF MINERAL AND COALMINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIAREPUBLIC OF INDONESIA

Majority of coal resources and reserves consist of lignite to subbituminous (low

THE STRATEGIC ISSUESj y g (

rank to medium) almost more than 90 % from all resources and reserve.

A b f l l t d t t l k f d t il l ti A number of coal reserve located at remote areas, lack of detail explorations, infrastructure, mining support, investment to developed this potency. It cause of hight cost for mining operations.

Limitation of Coal Hauling by Truck or Train and Port Facility (Jetty or Berth Port).

Some local governments has stipulated of ban for being used the public roads for coal hauling. We suggest for the company has own a special coal hauling.g gg p y p g

There are big opportunity for development of low rank and medium rank of coal s ch as mine mo th po er plant liq ifaction gassifications bc blending facilitsuch as : mine mouth power plant, liquifaction, gassifications, ubc, blending facility, drying etc..

The government will support and guarantee of security supplay for development of low rank to medium coal including of the certainty of price a long way to the project.

POLICY DIRECTION OF COAL MINING

REGULATIONSUPPORT

MATERIAL SUPPLY - Finance Minister ASSURANCES

TECHNOLOGY SUPPORT

LAW NO.4. YEAR 20091. ARTICLE 1702. ARTICLE 103

- Finance Minister Gov reg 1 dan 62/2008Fiscal policy

-BKPM- Ministry of IndustryMi i t f W kf

DOWN & UP STREAMINTEGRATION

-Ministry of Workforce

ENERGY SUPPORT

INFRASTRUKTURGov Reg NO :23. Year 2010

HUMAN RESOURCES COMPETENCY

INFRASTRUKTURgArticle 34, 26, 93-96

Draft of Mineral and Coal Added ValueOther regulations:1. Minister of General Works2. Ministry of Transportation3. Local governments

COAL ADDED VALUE1 Developing low rank coal as a part of application of value added of coal for instance:1. Developing low rank coal as a part of application of value added of coal, for instance:

- coal liquefaction - upgrading brown coal (UBC)- coal in-situ gasification - coal bed methane- coal to synthetic gas/ to ethanol - mine mouth power planty g p p- coking coal to coke - blending facility

- coal drying

DIRECT USEPower Plant

Industry

2. Coal briquette for small and middle scale industries

Gas

Industry

KONVERSI

LIQUEFACTION

GASIFICATION

Liquid

COAL

CWM

GasChemical Feedstock

KONVERSI GASIFICATION

LOW RANK COAL

COKESACTIVE CARBON

COAL

Clean Coal Technology

UPGRADING High Rank Coal

LOW RANK COAL

Clean Coal Technology

ISSUES COAL INVESTMENTOPPORTUNITIES

1 Domestic market • Exploration and exploitation

Coal gasification

1 Domestic market obligation, lack off transportation

Exploration and exploitation• Underground coal mining• Coal infrastructure (stock pile, blending

facilities, coal terminal, transportation)• G & G Survey Coal gasificationG & G Survey

2 Value added andenvironment

• Smelter & Refinery• Upgrading Brown Coal g g• Coal liquefaction• Coal gasification• Clean Coal Technology

CBM

gy

1.To develop coal mining in line with the principles atTHE WAY FORWARD AND OPPORTUNITY

p g p penvironmentally sustainable development and goodmining practises (environment, safety, economics andg p ( , y,social aspect considerations)

2 To effectively encourage the increase of state income and2.To effectively encourage the increase of state income andinvestment through national and international cooperation

3 To develop coal as energy (not only commodity) for3.To develop coal as energy (not only commodity) forinstrance, in 2025 coal contribution into energy mix about35% (including coal liquefaction)35% (including coal liquefaction)

4.Especially in Sumatra Island, the coal resource &i l t di lit d t th tresererve is low to medium quality and at the remote

location from barging point, so it will be economical whend l t th i i d th d tiend user close to the mining area and the productions

level in large scale.

MASTERPLAN FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT (MP3EI)

Sulawesi CorridorSumateraCorridor

Kalimantan Corridor

Sulawesi Corridor'‘'‘Central of Production Central of Production and Manufacture of and Manufacture of National Agriculture, National Agriculture, Plantation, Plantation, 

'‘'‘Central of Production Central of Production and Manufacture of and Manufacture of National Agriculture, National Agriculture, Plantation, Plantation, 

““Central of Central of Production and Production and ““Central of Central of Production and Production and 

Papua –Maluku Corridor

Fishery, and Nickel Fishery, and Nickel MiningMining''''Fishery, and Nickel Fishery, and Nickel MiningMining''''

Production and Production and Manufacture of Manufacture of National Natural National Natural and Energy and Energy ResourcesResources""

Production and Production and Manufacture of Manufacture of National Natural National Natural and Energy and Energy ResourcesResources""

““Central of Central of Production and Production and Manufacture of Manufacture of 

““Central of Central of Production and Production and Manufacture of Manufacture of National Mining National Mining and Energy and Energy ResourcesResources""

National Mining National Mining and Energy and Energy ResourcesResources""

““Central of Central of Development of Development of National Food, National Food, Fishery, Energy, and Fishery, Energy, and Mining”Mining”

““Central of Central of Development of Development of National Food, National Food, Fishery, Energy, and Fishery, Energy, and Mining”Mining”

Java Corridor““Supporting the Supporting the National Service National Service ““Supporting the Supporting the National Service National Service  '‘'‘Gate of Tourism and Gate of Tourism and '‘'‘Gate of Tourism and Gate of Tourism and 

MiningMiningMiningMining

Bali - Nusa Tenggara Corridor

Basically MP3EI is based on these strategic initiatives:

and Industryand Industry""and Industryand Industry""Gate of Tourism and Gate of Tourism and Supporting  Provider of Supporting  Provider of National Food and National Food and AgricultureAgriculture''''

Gate of Tourism and Gate of Tourism and Supporting  Provider of Supporting  Provider of National Food and National Food and AgricultureAgriculture''''

Main strategy of MP3EI:y g Encourage a large scale investment realization in 22 main

economic activities Synchronization of national action plan to revitalize the real

sector performance

Main strategy of MP3EI:Economic potential development through economic corridorStrengthening the national connectivitySt th i ti l hp

The development of center of excellence in 6 (six) economic corridorsSource: Coordinating Ministry for Economic Affairs, 2011

Strengthening national human resources capability and science and technology

7

ROLE OF MINING IN THE MASTER PLAN OF ACCELERATION AND

• Exploration and Exploitation

EXTENTION OF INDONESIA ECONOMIC DEVELOPMENT

• Exploration and Exploitation• Mining Facilities• Smelter• Coal Processing Facilities (Gasification and Upgrading etc)

MINING ACTIVITIES

• Road• RailwayINFRASTRUCTURE• Port

• Coal Based Power Plant• Mine Mouth Coal Based Power Plant for low rank to medium

coal• Renewable Energy Power Plant

ELECTRICITY

• Steel Industry• Cement Industry• Pulp & Paper

OTHER INDUSTRY• Pulp & Paper

INVESTMENT OPPORTUNITIES

o Mining infrastructure developments o Added Value of Coal (to development of processing)o Cooperation in underground coal mining developmento Cooperation in underground coal mining developmento Utilization of law rank coal (LRC) Coal liquafaction Coal gasification Coal gasification Mine-mouth power plant

MEMR d C l li f ti d ifi ti b i i (S thMEMR 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

CLOSING REMARK

There are some strategic issues that need to be covered in the mineral and coal subsector, for instance: priority to need domestic needs added value of mineral and coal renegotiation etcneeds, added value of mineral and coal, renegotiation, etc.

Th f i i t t i f th i l f t fThe foreign investment is one of the crucial factors for developing mining industry. There is a need to increase international cooperation to develop mining investment, technology and manpower developmenttechnology and manpower development.

In The Future development of low rank and medium coal is very important to increase domestic demand for coal. Regarding this matter we need investment from Japan especially in term ofmatter we need investment from Japan especially in term of technology and financial support.

www.djmbp.esdm.go.idj p g

Curriculum Vitae

Name : Ir Gultom Gushka Msi

Place & Date Of Birth : Padang, June 28 th , 1963

Addres : Jln Prof Dr Soepomo No.10 Tebet – Jakarta Selatan

Phone : (+6221)8161977351/ 81294838899

Email : gultomguska@gmail.com

Current Position : Deputy Directors in Business and Development Of Coal Enterprises – Divisions of Productions and Marketing Coal Supervisions at Directorate General of Mineral and Coal – Ministry of Energy and Mineral Resources Indonesia since April 2012April 2012.

Qualifications : 1990 , Graduate from Mining Faculty, Bandung Institute Of Technology (ITB),

2002 Graduate from Administrations of Int’l Business Indonesia University2002, Graduate from Administrations of Int l Business, Indonesia University

2003, Cessam - Cesmat Fountainebleau- Paris Perancis

Work Experience : 1991 in The Directorate General of General MiningWork Experience : 1991, in The Directorate General of General Mining

2001, in The Directorate General of Geology and Mineral Resources

2002 in The Directorate General of Mineral Coal and Geothermal2002, in The Directorate General of Mineral, Coal and Geothermal

2003, in The Directorate General of Mineral and Coal until now