INDONESIAN COAL MINING POLICY :

REGULATION AND LIMITING INDONESIAN PRODUCTION

Bambang Tjahjono Setiabudi

JOGMEC Coal Investment Promotion Seminar

Tokyo, 12 November 2014

DIRECTORATE GENERAL OF MINERAL AND COAL

MINISTRY OF ENERGY AND MINERAL RESOURCES

 INTRODUCTION
The 1945 Constitution of Indonesia, Article 33 : The land, the waters
and the natural resources within shall be under the power of the
State, and shall be used to the greatest benefit of the people .
The Mining Law No.4/2009 : Coal represents non renewable natural
wealth and possesses an important role in the fulfilling the needs of
life of many people; therefore the management of this resource
must be under the control of the State in order to provide real
added value to the national economy to achieve prosperity and
wealth for the community.
There are some issues regarding management of coal mining
business, such as CnC status, limiting production, export and DMO,
Registered Exporter of Coal, royalty, and ports for coal export, etc.
 The Role of Coal Mining Business

CSR PRO POOR HUMAN RESOURCES

LOCAL CONTENT

Coal resources for

PRO GROWTH PRO JOB
the people
wealth
STATE REVENUE

INVESTMENT PRO GOOD MINING PRACTICE

ENVIRONMENT
ADDED-VALUE REKLAMATION AND POST
MINING
TRADE BALANCE
(PRODUCTION, EXPORT
AND DOMESTIC)
 REGULATION
UUD 1945 Pasal 33 ayat (3)
Bumi dan air dan kekayaan alam yang terkandung di dalamnya dikuasai oleh negara dan
dipergunakan untuk sebesar-besar kemakmuran rakyat
Undang-Undang No 4 Tahun 2009 tentang Pertambangan Mineral dan Batubara
Pasal 4 ayat (1): Mineral dan batubara sebagai sumber daya alam yang tak terbarukan
merupakan kekayaan nasional yang dikuasai oleh negara untuk sebesar-besar kesejahteraan
rakyat.
Pasal 5: Untuk kepentingan nasional, Pemerintah setelah berkonsultasi dengan DPR dapat
menetapkan kebijakan pengutamaan mineral dan/atau batubara untuk kepentingan dalam
negeri. Kepentingan nasional tersebut dapat dilakukan dengan pengendalian produksi dan
ekspor
Undang-Undang No 30 Tahun 2007 tentang Energi
Pasal 21: pemanfaatan energi dilakukan diantaranya dengan mengoptimalkan seluruh potensi
sumber daya energi, dan memprioritaskan pemenuhan kebutuhan masyarakat.
Peraturan Pemerintah No 23 Tahun 2010 tentang Pelaksanaan Kegiatan Usaha
Pertambangan Mineral dan Batubara
Pasal 2: Pelaksanaan kegiatan usaha pertambangan mineral dan batubara ditujukan untuk
melaksanakan kebijakan dalam mengutamakan penggunaan mineral dan/atau batubara untuk
kepentingan dalam negeri
4
 REGULATION FOR DMO
Perjanjian Karya Pengusahaan Pertambangan Batubara (PKP2B)
UU No. 4 / 2009 tentang Pertambangan Mineral dan Batubara, Pasal
5 ayat (1).
Peraturan Menteri No. 34/2009 tentang Pengutamaan Pemasokan
Kebutuhan Mineral dan Batubara untuk Kepentingan Dalam Negeri.
Peraturan Pemerintah No. 23/2013 Pasal 84 ayat (1).
Keputusan Menteri sejak mengenai pedoman pelaksanaan DMO
Tahun 2010 - 2014.
Surat DirJen Minerba No. 5055/30/DJB/2013 tentang Teknis
Pelaksanaan Pemenuhan Presentase Minimal Penjualan Batubara
untuk Kepentingan Dalam Negeri.
Surat Dirjen Minerba No. 1118/36/DJB/2014 merubah kebijakan
DMO untuk kewajiban pasokan sesuai kontrak yang ada, dan jika
terjadi kekurangan pasokan batubara ke domestik maka akan
dilakukan penunjukan pemasok.
Peraturan Menteri No. 34/2009 sedang dalam proses revisi.
 COAL RESOURCES AND RESERVES

Data 2013: Coal Resources: 121 billion tons + 40 billion tons (U/G)
and Coal Reserves: 31 billion tons.
 RESOURCES, RESERVES AND COAL RANK

120,53
93,40

31,36

18,71

Coal resources and reserves increase 5% dan 11% , respectively per year
 Coal Mining Business
Coal Contract of Work (PKP2B)
Generati Year Total Terminati Active Explorati FS Constructi Producti
on on on on on
I 1981-1990 10 1 9 0 0 0 9
II 1994 18 6 12 0 0 0 12
III 1997-2000 113 59 54 4 7 10 33
Total 141 66 75 4 7 10 54
STAGE
STATUS TOTAL
EXPLORATION PRODUCTION

C&C 1.444 995 2439

NON C&C 1.032 400 1432
TOTAL 2.476 1395 3871
INDONESIAS MINERAL AND COAL INVESTMENT
(Million US$)
5.793,4
5.126,2
4.801,2
4.373,6 4.463,4

2.949,0

9
 PRODUCTION, EXPORT AND DMO

235
75
DMO:START IN 2010

Coal production increases 14% per year.

Domestic consumption should be priority, consuming 20%-25% of the total
production with 4% growth per year.
 ENERGY AND MINERAL RESOURCES REVENUE
In 2012, total state income from EMR sector is
Rp. 427,8 trillion (about 28% of national income)
and 29% is from mining sector
EMR Sector
450
Target and Realization of EMR Sector Income
400

350

300

Triliun Rupiah
250

200

150

100

50
Others
0
Geothermal 2009 2010 2011 2012* 2013**
Mining Rencana
plan 233,6 289,3 273,8 404,7 403,7
Oil and Gas
Realisasi
Realization 238,0 285,6 388,0 427,8 446,92
Contribution of mining to state income
increase almost 3 times at the last 5 years. The realization always above target
 TOP TEN INDONESIAN COAL EXPORT DESTINATION *)

*) only from CCow and PTBA

KOREA, REPUBLIC OF 2008 2009 2010 2011 2012 2013 Total

EXPORT (TON) 14.594.794 18.361.913 20.684.215 18.899.507 16.541.992 18.560.198 107.642.618
PT Adaro Indonesia, PT Arutmin Indonesia, PT Asmin Coalindo Tuhup, PT Berau Coal, PT
Indominco Mandiri, PT Insani Bara Perkasa, PT Jorong Barutama Grestone, PT Kaltim Prima Coal,
SUPPLIER PT Kideco Jaya Agung, PT Lanna Harita Indonesia, PT Mahakam Sumber Jaya, PT Mandiri Inti
(only from Ccow) Perkasa, PT Multi Harapan Utama, PT Multi Tambang Jaya Utama, PT Riau Bara Harum, PT Santan
Batubara, PT Tanito Harum, PT Singlurus Pratama, PT Teguh Sinar Abadi, PT Trubaindo Coal
Mining, PT Wahana Baratama Mining, ect.
 COAL PRODUCTION PLAN (2015 2019)
NO INDIKATOR KINERJA SATUAN 2015 2016 2017 2018 2019 KETERANGAN
5. Pemenuhan Batubara Domestik
a. DMO Batubara Juta Ton 103 111 120 130 140 Berdasarkan kebutuhan pengguna
Persentase 24% 26% 28% 30% 32% dalam negeri, naik 8%/tahun
b. Ekspor Batubara Juta Ton 322 318 313 308 302
Ekspor turun 1,5% per tahun
Persentase 76% 74% 72% 70% 68%
c. Produksi Batubara Juta Ton 425 429 434 438 442 Dikendalikan naik 1% per tahun

DMO batubara didorong untuk meningkat setiap tahun dengan peningkatan sekitar 8% per
tahun yang bertujuan untuk meningkatkan manfaat batubara untuk penggunaan domestik
sehingga memberi manfaat yang lebih besar bagi Indonesia. Dengan perkiraan produksi
batubara tahun 2015 hingga 2019 yang meningkat 1% per tahun dan peningkatan DMO
sebesar 8%/tahun maka ekspor 2015-2019 direncanakan semakin berkurang dengan tingkat
pengurangan 1,5%/tahun.

TANTANGAN:
Upaya untuk meningkatkan alokasi batubara untuk pengguna dalam negeri terutama untuk PLN
dengan penyelesaian pembangunan pembangkit listrik Tahap I dan pengalihan pembangkit
listrik BBM menjadi pembangkit listrik batubara sehingga batubara akan semakin besar
dimanfaatkan untuk kebutuhan energi listrik dan ekspor batubara berkurang.
 GOVERNMENT POLICY
1 To implement priority fulfillment of coal domestic needs
To provide certainty and transparency in the
2 activities of mining (Mining Law supporting
regulations, sanctions violations, etc.)
3 To implement supervision and guidance
POLICY
DIRECTION To encourage the increase of investment and
4
revenue
To encourage the development of added-value of
5 mining commodity (eg processing, refining, local
content, local expenditure, labor and CSR)
To maintain environmental sustainability through
6 environmental management and monitoring
(including reclamation and post-mining)
 COAL FOR DOMESTIC NEEDS

Domestic market is only 20 25 % of Total NationalSources:

Production
Decree of the MEMR DMO
Determination
Quality for domestic market : 4.000 6.500 Kal/Kg GAR
New DMO regulation will be revised. No more fulfillment of obligations by
transfer quota
DMO average for PLN: 64%; IPP: 17%; PLTU non PLN dan IPP : 2 %; Cement,
Fertilizer, etc: 16%; and Metallurgy: 1%.
 LEGAL CERTAINTY AND TRANSPARENCY

Mining Licence Settlement

Finalisation of Management System of IUP (MOMI)
Integration to other sectors
Contract Renegotiation (CoW and CCoW)
Finalisation of related mining regulations
Improvement of royalty collection and distribution
 IMPLEMENT SUPERVISION AND GUIDANCE
MINERBA ONE MAP INDONESIA (MOMI)
Minerba One Map Indonesia (MOMI) is a Geographical
Information System (GIS) on web-based built in 2013 by DGMC
The system contains all database of IUP all IUP database in
Indonesia (10.922 IUP).
MOMI can integrate all mining data from all over Indonesia (city,
regency, province) and data from other purposes.
MOMI can be used as a tool by local government to register
proposed WIUP for biding (coal and mineral) or for reserved (non
metallic and rocks)
Some advantages of MOMI, can be applied for:
1. Overlapping analysis of existing IUPs
2. Monitoring data related to mining zone
3. Data collaboration with other institutions on spatial based
4. Data Statistics Analysis related with IUPs
REGISTERED EXPORTER OF COAL
Regulation:
Minister of Trade Regulation No. 39 / M-DAG / PER / 7/2014 regarding the
export of Coal and Coal Products, as amended by Regulation of the
Minister of Trade No. 49 / M-DAG / PER / 8/2014, and Director General of
Mineral and Coal No. 714.K / 30 / DJB / 2014 regarding Procedures and
Requirements Referral Registered Exporter of Coal;

Purposes:
improving supervision of coal export sales to match the rules
controlling the sale of coal for domestic needs long-term prioritization
optimization of state revenue from coal exports

ENCOURAGE THE INCREASE OF STATE REVENUE

Issue regulations regarding the selling price of coal
Upfront royalty payment obligations (Director General Circular 04.E / 2013)
Registered Exporter of Coal (ET)
CCoW renegotiation / amendment
 COAL PRICE POLICY
Catatan :
UU NO. 4/2009 Untuk PKP2B diatur dalam Kontrak
Pasal 6 Ayat 1 K PKP2B Pasal 12 / 13
PerMen 10/2014
(4 April 2014) PP NO. 23/2010 (1 Feb 2010)
Pasal 85
Kepdirjen 479/2014 (30 Mei 2014)
diperbarui Surat Dirjen 1619/2014 (22
Sept 2014) PerMen No. 17/2010 (23 Sept 2010)
Pasal 11 Ayat 4 Pasal 21 Ayat 4 Pasal 13 Ayat 4 Pasal 21 Ayat 4 Pasal 12 Ayat 5

PerDirjen No. 515/2011 KepMen No. PerDirjen PerDirJen No. PerDirJen KepDirJen
ttg Formula Harga 0617/2011 1348/2011 644/2013 480/2014 481/2014
Batubara ttg Harga ttg Harga sebagai ttg Batubara ttg Surveyor
(24 Maret 2011) Batubara Batubara untuk perubahan Jenis & Batubara
ke PLN Pembangkit 999.K/2011 Keperluan (30 Mei 2014)
KepDirJen (3 Maret Listrik Mulut ttg Biaya Tertentu
ttg Harga Batubara 2011) Tambang Penyesuaian (30 Mei 2014)
Bulanan (9 Des 2011) (21 Maret
2013)
Kepdirjen 479/2014
HPB Marker & HPB
HBA
lainnya Coking Coal

Hard Coking Semi Soft Coking Pulverised Coal Injection

OPTIMALIZATION FOR CONTROLLING PRODUCTION
DAN MARKETING
KEBIJAKAN PERKEMBANGAN SAAT INI
Pendataan produksi dan penjualan berbasis IT. Kajian dengan Sucofindo
Penerapan sangsi terhadap ketidakpatuhan Penyusunan Permen
pelaporan.
Pencegahan kebocoran royalti dengan Penyusunan Permen;
pembayaran dimuka. Penerapan ET

Penyusunan database perusahaan pengekspor Penerapan ET

batubara.
Penyusunan format pelaporan pembayaran Penyusunan Permen
royalti dengan lampiran perhitungan royalti dan
pembanding harga dengan HPB.
Peningkatan koordinasi antar lembaga Penerapan ET
pemerintah.
Pengawasan kegiatan survey dengan Kerjasama dengan Puslitbang
ditunjuknya surveyor witness. Tekmira
Pengaturan pelabuhan ekspor batubara. Koordinasi dengan Ditjen
Perhubungan Laut
 REGISTERED EXPORTER OF COAL
Regulation:
Minister of Trade Regulation No.39/M-DAG/PER/7/2014 regarding the export of
Coal and Coal Products, as amended by Regulation of the Minister of Trade No.
49/M-DAG/PER/8/2014, and Director General of Mineral and Coal
No.714.K/30/DJB/2014 regarding Procedures and Requirements Referral
Registered Exporter of Coal.

Purposes:
Improving supervision of coal export sales.
Controlling coal sale for domestic needs (long-term).
Optimalization of state revenue from coal exports.

INCREASING NON-TAX STATE REVENUE (PNBP)

Royalty tariff will be increased for Mining Business Permits.
Royalty payment before shipment.
Coal Exporter Certificate (ET)
 IMPROVEMENT OF ADDED VALUE
Power Plant
DIRECT USE
Industry

Liquefaction Liquid CWM

COAL CONVERSION Gasification Gas

Chemical Feedstock
Cokes
Active Carbon
LOW RANK COAL

UPGRADING High Rank Coal

Clean Coal Technology

 PRIORITY OF COAL FOR DOMESTIC NEEDS
Condition 2007-2009
Scarcity of coal threat due to coal
supplier prefer to export due to price
differecdne
No regulation of DMO
PLN said to import coal
UU 4/2009 issued as a new era of mining
DMO should be applied
Target UKP4 of 2009 to issue GR of DMO
GR NO 34 /2009 about mineral
and coal for domestic need
Condition 2010-2013
- GR. 34/2009 main content:
1. Determination of DMO
2. Transfer quota;
3. DMO price;
4. Monitoring and sanction
- DMO Implementation rising from year to year :
1. 2010 (36 PKP2B, 1 BUMN dan 6 IUP OP);
2. 2011 (42 PKP2B, 1 BUMN dan 10 IUP OP);
3. 2012 (40 PKP2B, 1 BUMN dan 22 IUP OP);
4. 2013 (45 PKP2B, 1 BUMN dan 28 IUP OP);
5. Plan2014 (50 PKP2B, 1 BUMN, and 34 IUP
OP);
- Weakness of DMO:
1. Complicated administration process
2. Surveyor regulation not yet issued
3. Human resources, etc

FUTURE POLICY
DMO without transfer quota mechanism, with contains three aspects:
1. Planning of DMO (quantity and quality)
2. Prevention of coal scarcity
3. Action on emergency condition (coal scarcity)
 DEDICATED PORTS FOR COAL EXPORT (PROPOSED LOCATIONS)
Aceh
Aceh Selatan.
West Sumatera East Kalimantan
Padang 1. Balikpapan bay
2. Adang Bay
Riau 3. Berau Bay
Riau Bay 4. Maloy Bay

Jambi
Jambi Bay

Bengkulu
Bengkulu Port

Sumsel South Kalimantan

Tanjung Api Api 1. Tobaneo/Pulau laut,
2. Sungai Danau,
Lampung 3. Batu Licin
Tarahan
Transhipment only be done around the coal main port and can be directly seen from the port
(maximum of about 2 km from land).
Coal Main Port concept has been applied in various countries, such as Australia, South Africa etc.
Given a transition period after the decree ban on transhipment at sea for a maximum of 3 years (coal
main port development).
Coal main port owned by private or state-owned companies / enterprises with locations specified by
the Director General / Minister.
Coal exports through coal main port only.
DEREGULATION

Jenis Perizinan
Rekomendasi/
Izin Persetujuan
No Instansi Sertifikasi Jumlah Perizinan EXISTING
Mandator Tiap Instansi
Optional Mandatory Optional Mandatory Optional
y

Kewenangan
1
KESDM 4 12 24 13 2 1 56
Kewenangan
2 ESDM + 0 2 0 9 0 9 20
Kementerian Lain
Kewenangan
3 Kementerian 11 9 1 1 3 0 25
Lain/PEMDA

JUMLAH IZIN 15 23 25 Jenis Perizinan

23 5 10 101
Rekomendasi/
No Instansi Izin Persetujuan
Sertifikasi Jumlah Perizinan USULAN
Mandator Tiap Instansi
Optional Mandatory Optional Mandatory Optional
y

Kewenangan
1
KESDM 3 6 8 7 2 0 26
Kewenangan
2 ESDM + 0 2 0 9 0 9 20
Kementerian Lain
Kewenangan
3 Kementerian 11 9 1 1 3 0 25
Lain/PEMDA

JUMLAH IZIN 14 17 9 17 5 9 71
Kewenangan KESDM Kewenangan KESDM + Kementerian Lain Kementerian Lain/PEMDA
www.minerba.esdm.go.id