ICCS Summit focuses on major coal issues

ICCS Summit focuses on major coal issues

Photo document of coal mining in South Sumatra. (ANTARA/Zabur Karuru)

"Our coal deposit in the future must not be exported but used to meet domestic need."
Jakarta (ANTARA News) - The first Indonesia-China Coal Summit (ICCS) in Nusa Dua, Bali, from March 19 to 20, 2013 is focused on major coal and energy issues.

The conference also focuses on two giant countries of Indonesia and China with huge energy potentials and at the same time as energy consumers to play a key role in stabilizing the supply demand of energy in Asian region.

ICCS is an opportunity for both countries and those which are interested to have coal business in China and Indonesia to conduct meetings on coal trading, future investment in energy and infrastructure, and cooperation in clean coal technology.

Head of the Indonesian Agency for Assessment and Application of Technology (BPPT) Marzan A. Iskandar said in Nusa Dua on Tuesday that Indonesia and China in the summit would cooperate to create a clean coal processing technology to make use of low-quality coal.

Marzan noted that the source of energy in the future would be dominated by coal.

"But coal has a lot of problems that can contribute to environmental pollution, and therefore we need a variety of clean coal technology," Marzan said.

The summit is attended by around 300 participants from different perspectives of coal, energy, mineral resources related businessmen as well as regulators from Indonesia, China, South Korea, and Japan.

With strong government support from both countries, ICCS is aiming to provide information gathered by market participants, and help them better understand present and future developments surrounding their business activities

According to Marzan, it is very important to create clean coal processing technology to reduce carbon emission which can contribute to health problem and global warming.

"Our coal deposit in the future must not be exported but used to meet domestic need," he noted.

But because 50 percent of coal is still geologically young with the lowest carbon content, Marzan said a new technology should be sought to increase its value.

According to American Coal Foundation, coal is classified into four general categories, ranging from lignite through subbituminous and bituminous to anthracite, reflecting the progressive response of individual deposits of coal to increasing heat and pressure.

Lignite ranks the lowest and is the youngest of the coals, while anthracite is coal with the highest carbon content, between 86 and 98 percent, and a heat value of nearly 15,000 BTUs-per-pound.

Bituminous coal has a carbon content ranging from 45 to 86 percent and a heat value of 10,500 to 15,500 BTUs-per-pound.

Ranking below bituminous is subbituminous coal with 35-45 percent carbon content and a heat value between 8,300 and 13,000 BTUs-per-pound.

Meanwhile, member of Presidential Advisory Council for foreign relations Hasan Wirayuda said in the summit that Indonesia and China are coal producing countries but they also need that hard black mineral a lot.

According to Wirayuda, China produced 3.47 billion tons of coal in 2012 still importing 190 million tons per year from various countries, while Indonesia produced only 360 million tons the same year.

He said Chinese high demand of coal has something to do with the country`s fast economic growth in the past two decades that reached 12 percent per year.

But he added that Indonesia`s economic growth in the past three years was 6 to 6.5 percent per year.

"Indonesia`s fast economic growth should be supported by energy resources and infrastructure, and China with the biggest foreign reserves of up to US$3.7 trillion should not have had a problem to invest in Indonesia," Wirayuda said.

According to China Daily in its website, www.chinadaily.com,

China coal imports are expected to maintain growth in 2013, sustaining supply from major exporters like Indonesia and Australia.

China`s coal import in the first 11 months in 2012 reached 245 million tons, up 34.9 percent from a year earlier, according to China Coal Transportation and Distribution Association.

The amount of imported coal has grown steadily over the past three years due to the decline of prices in the international market and low shipping costs.

Meanwhile, the supply from major coal exporters like Indonesia and Australia has been growing, creating strains of over supply. Most of China`s imported coal comes from Indonesia.

Meanwhile, expert staff to the minister of research and technology for energy and material, Agus R. Hoetman, said Indonesia and China should find a new strategy to improve the quality of young coal in order to be utilized properly.

"China has an opportunity to invest in energy infrastructure in Indonesia so that coal industry can meet the industrial needs of electricity in 203," Agus said.

According to forecast by the International Energy Agency (IEA), Indonesia will produce 500mt/year of coal by 2020, and will continue to provide leadership to global coal trade in the next ten years.

Indonesia accounts for 40 percent of China`s 2012 imports, which will be above 250mt. It is also responsible for at least 25 percent of global coal exports.

China`s demand will hit 4.5bn tons/year by 2020, and nearly 5bn tons/year by 2030, according to IEA.

Thermal generation will remain the major power source for China for decades to come.

Its demand for steam coal is also set to grow steadily from current 2bn tons/year, along with economic development.

China`s coal demand is vital to Indonesia`s coal sector. Changes in Indonesia`s coal sector will have immediate effect on China`s energy supply as well as the macro economy.