Foreword

The condition of oil price that was so high, has just sharply corrected, but it was not yet clear when it would turn back to the more achievable normal price. For certain, until now the coal price is still high even it has been slightly corrected. Even maybe it would be strengthened again, considering the demand of this mine product has exceeded its supply.  During 2007, global deficit of coal supply was 156.5 million tons has triggered the boost of global coal price up to three times within the last two years, which was from US$ 40 to US$ 120 per ton (reference from several types of high calorie coal) in the middle of 2008. Even in the trading in New York Mercantile Exchange in July 2008, the coal contract price in Asian market has reached the new highest record of US$ 137 per ton.
As the seventh largest coal producer in the world, the role of Indonesia would be improving, considering the existing deposit is waiting to be exploited. The recent national coal production during the last five years has grown very fast from 2004 of 132.1 million tons to 216.9 million tons in 2007, and in 2008, it was predicted to reach 226 million tons. Therefore, since 2006, Indonesia has become the second largest coal exporter in the world after Australia, with export volume of 183.9 million ton worth US$ 6.08 billion, overpasses China and South Africa. While in 2007, it became about 190 million tons with a value about US$ 6.53 billion. It means that the average export price was slightly increased.

In line with the export, the domestic coal consumption was also increasing from 2003 of 30.7 million tons to about 49 million tons in 2007, and in 2008 about 50 million tons. Most of them were absorbed by the electricity sector (PLTU), which in 2007 consumed about 35.3 million tons or about 71.8% from the total national coal consumption, among other by PLTU Suralaya 12.5 million tons and PLTU Paiton 12.6 million tons. The others were absorbed by cement industry up to 7 million tons, pulp and paper industry about 1.5 million tons, and some other industry sectors.
 
As this mine product has become the global primary source of electric energy, it caused the boost of recent coal needs. Indonesia is also pacing in using coal as the main source of electric energy, replacing the role of oil fuel that is becoming more expensive (before the price was corrected recently). The effort is among other that the government is planning to build coal powered electric generator of 10,000 MW within the next three years. Surely, this would boost the domestic coal needs. Until the next 2010, when all the PLTU projects has operating, according to APBI (Association of Coal Company in Indonesia), domestic coal consumption would reach 90 million tons, or there would be an increase of 40 million tons compared to the present needs.

On the contrary, the present domestic coal supply condition tends to decrease, including the supply to PT Electric State Company (PLN), so it increased the load of national electricity crisis. In fact, the problem laid not on the domestic market obligation (DMO) or the obligation of the mine contractor to provide some mine product for the government purposes could not be fulfilled, but it was on the coal price agreement of the government. Beside, the supply problem that was only provided by some companies, and the weather condition that stagnate the transportation of coal by sea.

Therefore, to fulfill the domestic coal needs, the government is also pacing the national coal production growth. At least, the government has tried to conclude the regulation aspect by validating the UU Minerba by the Indonesian Parliament (DPR-RI) by the middle of December 2008. Still, in this case, there should be a description of the implementation that is more comprehensive and conducive concerning the influence of other involved sectors, such as oil and gas, taxation, royalty, national and regional political climate, capital market condition, geopolitics and technology. Among other the overlapping of central and regional regulation as the result of regional autonomy regulation, mafia in the existing Mining Authority (KP), taxation problem that was not consistence, which made some coal company officers were banned. All of these law uncertainties in Indonesia are considered one of the problems of the investor's entry into the mining sector.

Considering the large potency and business opportunity in the coal mining sector in Indonesia, PT Media Data Riset (Mediadata) has made a study in a 500 pages book. This book is very useful for the players, investors candidate, service industry involved, such as heavy equipment supplier, and other financing institution. This book is offered with the price of Rp 5,000,000.00 (Five million rupiah) per copy for the Indonesian version and US$ 750 (Seven hundred and fifty US dollar) for the English version with negotiable exchange rate. For those who is interested, please do not hesitate to contact PT Media Data Riset, Jakarta, by email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it / This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or by phone number (021) 809-3140, 809-6071, Fax number (021) 809-6071, mobile phone number 0852 1706 1945. For overseas or outside Jakarta order, additional delivery fee would be charged. Thank you for your kind attention.

Table of Content

1. INTRODUCTION
 
2. POPULATION AND GENERAL DESCRIPTION OF INDONESIAN ECONOMIC
 
3. KEY ISSUE IN COAL BUSINESS
3.1. Recent energy condition in Indonesia
3.2. National Coal Policy (Kebijakan Batubara Nasional - KBN) 2004 – 2020
3.3. Investment pattern of coal in the autonomy era (Comparison of UU No.11/1967 with UU Minerba 2009)
3.4. PKP2B Contractor status
3.5. Second largest coal exporter in the world
3.6. Domestic Coal Needs Supply Obligation (DMO)   

4. COAL RESOURCE AND QUALITY IN INDONESIA
4.1. Classification of coal resource
4.2. Classification of coal deposit
4.3. Basic Classification
4.4. Coal deposit in Indonesia
4.4.1. Sumatera coal
4.4.2. Kalimantan coal
4.4.3. Coal in other areas
4.5. Coal mining business area spreading
4.5.1. Coal production development in Sumatera
4.5.2. Coal production development in Kalimantan
4.5.3. Coal mining condition in other areas
4.6. Coal specification and quality
4.7. Mining method
4.7.1. Coal mining process up to its transportation
4.7.2. Equipment needed
4.7.3. Coal mining operation
4.7.4. Coal mining expense

5. COAL MINING DEVELOPMENT PATTERN IN INDONESIA    
5.1. Coal contract from time to time
5.1.1. Coal Cooperation Contract Generation I (1981-1993)   
5.1.2. Coal Cooperation Contract Generation II (1993-1996)     
5.1.3. Coal Cooperation Contract Generation III (1996-2004)   
5.2. Requirement and phase in coal mining             
5.2.1. General Survey phase      
5.2.2. Exploration phase       
5.2.3. Feasibility Study phase
5.2.4. Construction phase   
5.2.5. Production activity phase   
5.3. Main provisions in PKP2B
5.3.1. Provision of Law and technique
5.3.2. Financial and Tax provision
5.3.3. Other provision     
5.4. Recent Coal Mining Industry Condition   
5.5. Factors influencing coal mining   
5.6. Mineral resource and coal mining in autonomy era   
5.7. Coal mining development problem
5.8  Government effort in encouraging investment in mining sector   
5.9. Coal utilization potency     
5.9.1. Coal liquefaction   
5.9.2. Upgrading coal quality (Upgrade Brown Coal/UBC)
5.9.3. Pilot project of brown coal liquefaction (BCL)
5.9.4. Coal Methane Gas (Coal Bed Methane)
5.9.5. Coal Gasification
5.9.6. Coke (Coking Coal)

6. PRODUCTION DEVELOPMENT
6.1. Development of the amount of coal mining company
6.1.1. PKP2B contractor companies that has been producing
6.1.2. East Kalimantan Province has the largest concession
6.2. Production development
6.2.1. 2007 production reached 216.9 million tons and 2008 194.3 million tons
6.2.2. Coal production is dominated by PKP2B companies
6.2.3. The largest coal producer is PT Kaltim Prima Coal and PT Adaro Indonesia
6.3. Investment development
6.3.1. PKP2B Generation I
6.3.2. PKP2B Generation II   
6.3.3. PKP2B Generation III   
6.3.4. Mining Authority (Kuasa Pertambangan - KP)   

7. COAL BRIQUETTE        
7.1. Product description           
7.1.1. Requirement       
7.1.2. Briquette production  technology     
7.2. Coal briquette producer
7.2.1. Briquette production and sales development       
7.3. Export development        
7.3.1. Export gained foreign exchange of US$ 9.2 million     
7.3.2. The largest export is to Japan
7.4. Consumption           
7.5. Prospect           

8. EXPORT AND IMPORT DEVELOPMENT
8.1. Export development       
8.1.1. Export gained foreign exchange of US$ 6.5 billion       
8.1.2. The largest export is bituminous type
8.1.3. Japan absorbed the largest coal of Indonesia        
8.1.4. Coal export of PT Kaltim Prima Coal reached 37.5 million tons
8.2. Import development
8.2.1. Import in increasing
8.2.2. Coal import absorbed foreign exchange     
8.2.3. Vietnam the largest supplier
8.3. Global coal trade
8.3.1. Global coal Import
8.3.2. Global coal export
8.4. Global coal price development     
8.4.1. Coal producer would implement coal price index        

9. DOMESTIC COAL SALES
9.1. Domestic coal market share absorbs averagely 25.7% per year       
9.2. Domestic sales
9.2.1. Year 2007, coal sales reached 64 million tons        
9.2.2. Coal sales contributed from PKP2B companies reached 84.4%
9.2.3. PT Adaro Indonesia is the largest domestic coal supplier
9.2.4. Domestic sales per province       
 
10. DOMESTIC COAL CONSUMPTION
10.1. Consumption increases averagely 15% per year       
10.2. Coal consumption based on the user sector       
10.2.1. PLTU the largest coal user
10.2.2. PLTU Suralaya (Unit I-VII) absorbed coal about 12.5 million tons per year
10.2.3. PLTU projects       
 
11. COAL TRANSPORTATION AND  INFRASTRUCTURE       
11.1. General description
11.2. Coal Transportation type
11.2.1. Train transportation   
11.2.2.Train Coal transportation  improvement
11.3. Facility and infrastructure factors become a problem
11.3.1. Coal terminal  
11.4. Overcoming coal transportation and  infrastructure problem       
11.4.1. Coal transportation infrastructure       
11.4.2. Coal terminal development project of Tanjung Api-Api
11.4.3. Department of Transportation reviews privatization of train coal transportation  
11.4.4. Plan to build railway outside Java   
12. CAPITAL CAPABILITY AND HEAVY EQUIPMENT
12.1. Capability of capital goods industry against mining industry
12.1.1.  Heavy equipment needs in Indonesia
12.1.2. Thinking pattern
12.1.3. Category of heavy equipment competing power
12.1.4. Heavy equipment competing power
12.1.5. Heavy equipment need based on industry sector
12.1.6. Heavy equipment expenditure in the construction sector
12.1.7. Production based on heavy equipment type
12.1.8. Domestic production of heavy equipment
12.1.9. Production, investment, and man power of heavy equipmentindustry
12.1.10. Hinabi product range
12.1.11. Production and investment of  geothermal operation supporting industry
12.2. Development framework of heavy equipment development
12.3. SWOT analysis of heavy industry
12.4. Opportunity
12.4.1. Infrastructure Summit 2005 result
12.4.2. Demand projection of heavy equipment in Indonesia
12.5. Strategy
12.5.1. Industry Strategy of heavy equipment development
12.5.2. Government Strategy for heavy equipment development
12.6. Problem and solution
12.6.1. Market (Demand Pull)
12.6.2. Industry capability
12.6.3. Solution by the player and government support
12.6.3. Phase proposal of government support
12.6.4. Expected heavy equipment industry
12.7. Heavy equipment producer in Indonesia and Asia
12.8. Backward & Forward Linkage

13. BANKING ROLE IN COAL MINING BUSINESS
13.1. Banking background in supporting coal industry
13.1.1. Executive Summary
13.1.2. Superiority in choosing coal industry
13.1.3. Regulation factor support  
13.1.4. National Energy Mix Blue Print 2025
13.2. Coal industry potency  
13.2.1. Action program   
13.2.2. Coal needs for electric generator
13.2.3. Bukit Asam is capable to supply coal to PLTU Suralaya
13.2.4. Company gained coal contract of Rp 5.5 trillion/year
13.2.5. Coal generator expense is very efficient
13.3. Electric production based on fuel
13.3.1. PLN electric generator expenses
13.4. The role of Bank mandiri in coal industry
13.4.1. Coal industry financing potency
13.4.2. Facility provided by Bank Mandiri
13.4.3. Banking problem in facing financing in coal sector
13.4.4. Bank Mandiri contract to finance coal mining   

14. PROJECTION OF SUPPLY AND DEMAND
14.1. Production projection   
14.2. Consumption projection        
14.2.1. Projection of coal consumption for PLTU   
14.2.2. Projection of coal for cement industry       
14.2.3. Projection of coal for other industry
14.2.4. Total coal consumption projection
14.3. Prospect           

15. COMPANY PROFILE       
15.1. PT Tambang Batubara Bukit Asam
15.1.1. General description
15.1.2. Business activity
15.1.3. Production process   
15.1.4. Coal deposit and quality
15.1.5. Business development
15.1.6.  Business development plan
15.2. PT Adaro Indonesia       
15.3. PT Allied Indo Coal
15.4. PT Arutmin Indonesia       
15.5. PT Berau Coal           
15.6  PT BHP Kendilo Coal Indonesia
15.7. PT  Indominco Mandiri       
15.8. PT Kaltim Prima Coal       
15.9. PT Kideco Jaya Agung       
15.10. PT Multi Harapan Utama   
15.11. PT Tanito Harum       
15.12. PT Antang Gunung Meratus   
15.13. PT Bahari Cakrawala Sebuku   
15.14. PT Bentala Coal Mining   
15.15. PT Gunung Bayan Pratama Coal
15.16. PT Interex Sacra Raya (ISR)   
15.17. PT Jorong Barutama Greston   
15.18. PT Bukit Baiduri Enterprise   
15.19. PT Bukit Sunur       
15.20. PT Karbindo Abesyapradhi   
15.21. PT Kitadin Corporation
       
- ATTACHMENT       

- DIRECTORY