Southeast Asia - Marston
Southeast Asia
coal review
Donald L. Ewart Jr., Marston, Inc., US, examines the current situation in each of Southeast Asia’s
T
The Southeast Asia region encompasses the countries of Brunei, Indonesia, Kampuchea, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines (Figure 1). Coal is currently produced in seven of the 10 Southeast Asian nations and is consumed to some degree in all of these countries except Brunei and Kampuchea. Indonesia and Vietnam are the only Southeast Asian countries that export coal. Coal is not currently produced in the countries of Brunei, Kampuchea and Singapore, while the remaining Southeast Asian countries all produce varying amounts of coal. Figure 1 shows that Indonesia, Malaysia, Vietnam and the Philippines produce primarily hard coals (i.e. anthracite, bituminous and subbituminous coals), while Thailand produces lignite only. Laos and Myanmar produce both hard coal and lignite. Figure 2 shows that combined coal production from the seven Southeast Asian coal-producing countries increased from approximately 83 million t in 1996 to almost 126 million t in 2001. This increase in regional coal output over the last 6 years was primarily attributable to the growth in Indonesian coal production, as the other Southeast Asian coal producers posted decreases or only modest increases in coal production over the same period. Coal production from the still developing Myanmar coal industry is currently less than 0.1 million tpa. Through 2001, Laos’s annual coal production has been less than 0.25 million tpa, while Malaysia has produced less than 0.5 million tpa. Historically, coal production from the Philippines has not exceeded 1.5 million tpa. Thailand and Vietnam both currently produce in excess of 10 million tpa of coal, while Indonesia’s current annual coal production exceeds 90 million tpa. Indonesia currently consumes less than 30% of its total annual coal production
coal producing countries.
Figure 1. Map showing the coal producing countries of Southeast Asia.
domestically, while Vietnam’s domestic coal consumption accounts for more than 60% of the country’s annual coal output. The Reprinted from
World Coal • February 2003
remaining Southeast Asian coal-producing nations consume all of their domestic coal production internally, with Malaysia, the
Figure 2. Southeast Asian coal production.1
Philippines and Thailand also requiring import coal to satisfy domestic demand. Figure 3 shows that consumption of Southeast Asian coals has increased from 80 million t in 1996 to almost 110 million t in 2000. Historically, more than 50% of the coals produced by Southeast Asian countries have been consumed within the region, with the remainder being exported to markets in Japan, Central Asia, Europe and the Americas. Power generation represents the primary coalconsuming sector in most Southeast Asian countries.
Indonesia
Figure 2 shows that coal production in the Southeast Asian region is dominated by Indonesia, which ranks eighth in terms of world coal production. Since 1996, Indonesia’s annual coal production has increased by over 40 million tpa (80%), with production levels increasing from 50 million t in 1996 to over 91 million t in 2001. Indonesia currently produces bituminous and sub-bituminous rank coals from more than 35 different mines in East Kalimantan, South Kalimantan and Sumatra. Almost all of Indonesia’s coal production is derived from open-pit mines, with only three small underground mines currently in operation. The locations of the major Indonesian coal mines are shown in Figure 4. Coal production in Indonesia is from: l The state-owned enterprise PT Tambang Batubara Bukit Asam (PTBA). l Holders of Coal Contracts of Work (CCoW) or ‘Coal Contractors’. l Mining Authorisation (or KP) Holders. l Co-operative Units (KUDs).
Figure 3. Consumption of Southeast Asian coals.2
There are three generations of actively producing coal contractors in Indonesia with different ownership, royalty and tax provisions applying to each generation. In 2001, there were 10 producing first generation coal contractors in Indonesia, five producing second generation coal contractors, and five producing third generation coal contractors. Additionally, 10 KP Holders and five KUDs produced coal during 2001. Recent trends in Indonesian coal production by producer-type are depicted in Figure 5. The Figure shows that first generation coal contractors account for the bulk of Indonesian coal production. In 2001, they accounted for almost 75% of Indonesia’s total coal production. The largest first generation coal contractors are PT Adaro Indonesia (which produced 18.1 million t of coal in 2001), PT Kaltim Prima Coal (2001 coal production of 15.5 million t), PT Kideco Jaya Agung (10.4 million t), and PT Arutmin Indonesia (9.5 million t).
Adaro and several other first generation contractors are jointly owned by foreign and domestic interests. Arutmin has recently become 100% Indonesian-owned, while Kaltim Prima Coal (KPC) and Kideco are in the process of divesting a share of their ownership to Indonesian investors, as required by the terms of their respective CCoWs. In fact, KPC has been involved in a protracted dispute with the Indonesian government regarding the purchase price for a share of the company. Although only accounting for 8% of 2001 coal production (Figure 5), Indonesia’s second and third generation coal contractors are expected to account for an increasing share of total Indonesian coal production as currently developing mines reach full capacity and proposed new coal projects come online. Second generation contractors PT Gunung Bayan Pratama Coal and PT Jorong Barutama Greston are scheduled to significantly increase coal
First generation coal contractor mining operation in East Kalimantan, Indonesia. Reprinted from
World Coal • February 2003
Indonesia’s coal-fired electric generating capacity has more than doubled in the last six years, increasing from less than 3000 MW in 1996 to almost 7500 MW in 2001. Major additions to Indonesia’s coal-fired generating capacity since 1996 include:
l The construction of three 600 MW units at the Suralya Power Station in 1997 – 1998. l The commissioning of units 7 and 8 of the Paiton Independent Power Producer (IPP) Project in 1999 (1230 MW). l The startup of the 130 MW AsamAsam Power Station in 2000. l The commissioning of Units 5 and 6 of the Paiton IPP Project in 2000 (1220 MW).
Figure 4. Approximate locations of coalfields and mines of Indonesia.
production at their developing Bayan and Jorong mines shortly, while several other currently operating second generation contractors have the potential to significantly expand coal production within the next few years. Also, the recent opening of PT Lanna Harita Indonesia’s Muara Badak Mine is expected to increase coal production from third generation contractors by at least 1.2 million tpa. Additionally, several new second and third generation contractor coal mines are projected to be developed by 2005. The Mandiri, Kartika, and Riau Baraharum coal projects (Figure 4) are all currently in the construction phase, while feasibility studies are being performed for the Nusa project and several other third generation concession areas. One of the major issues facing the Indonesian coal industry is illegal mining. In addition to the loss of revenue to legitimate coal concession holders, past and ongoing illegal coal mining operations in
Figure 5. Indonesian coal production.3
Indonesia, especially in South Kalimantan, have created serious environmental liabilities. The costs of mitigating this environmental damage will have to be absorbed by either legitimate coal producers or the government. The extensive illegal mining that occurred on the Arutmin Coal Concession may well have influenced BHP Billiton’s recent decision to sell its entire share of the operation to Indonesian investors. Figure 3 shows that Indonesia is not only the largest Southeast Asian coal producer, it has also become the largest consumer of Southeast Asian coal. Between 1996 2000, Indonesia’s domestic coal consumption doubled from 11 to 22 million tpa. This increase in coal consumption is largely attributable to the growing demand for electricity in Indonesia and the country’s increasing reliance on coal-fired power generation to meet this heightened demand. Figure 6 depicts the increase in Southeast Asian coal-fired generating capacity over the last six years. The Figure shows that
Indonesia exports a wide variety of bituminous and sub-bituminous steam coals, primarily from mines in Kalimantan. The primary export markets for Indonesian steam coals are Taiwan, Japan, South Korea, Europe, India and several Southeast Asian countries (i.e. the Philippines, Malaysia and Thailand). Indonesia is also the only exporter of ultra-low sulphur sub-bituminous coals, with these coals gaining increased acceptance in Asian markets.
Thailand
Between 1997 - 2000, Thailand’s annual lignite production dropped more than 5.5 million tpa from a peak production level of over 23 million t in 1997 to less than 18 million t in 2000. This decline in lignite production was directly attributable to the reduced demand for energy and cement caused by the Asian economic crisis. In 2001, Thailand’s lignite production rebounded slightly to almost 20 million t. Over 75% of Thailand’s total annual lignite production comes from a single operation, the Mae Moh surface mine, located in northern Thailand. All lignite produced from the Mae Moh Mine is consumed by
Figure 6. Southeast Asian coal-fired generating capacity. Reprinted from
World Coal • February 2003
The recently commissioned Asam-Asam Power Station in South Kalimantan, Indonesia.
the mine-mouth Mae Moh power station. Thailand’s remaining lignite production is derived from a handful of small to medium-sized surface mines located primarily in the northern part of the country. The three major lignite producers in Thailand are the Electric Generating Authority of Thailand (EGAT), Banpu Public Company Limited (Banpu), and Lanna Resources Public Co., Ltd (Lanna Resources). EGAT, which operates the Mae Moh surface mine in northern Thailand, accounted for 78% of Thailand’s 2001 lignite production. Banpu and Lanna Resources currently operate two lignite mines each, with these four operations accounting for approximately 20% of Thailand’s 2001 lignite output. EGAT has plans to develop the Wiang Haeng lignite deposit in northwest Thailand within the next few years. Due to its relatively higher heat content and lower sulphur content, Wiang Haeng lignite will be used to supplement lignite production from the Mae Moh Mine. Figure 3 shows that Thailand’s consumption of domestically produced lignite and imported coal from other Southeast Asian countries (primarily Indonesia) declined over the 1996 - 2000 period; decreasing from a high of 26 million t in 1997 to 20 million t in 2000. Thailand currently has one lignite-fired power plant, the 2625 MW Mae Moh power station, which consumes over 75% of the country’s total lignite production. The remainder of Thailand’s lignite production, plus an increasing amount of imported coal (more than 4 million t in 2000), are consumed by domestic cement, steel and pulp and paper industries. Figure 6 shows that Thailand did not install any additional coal-fired generating capacity during 1996 - 2001. However, three separate IPP consortiums have plans to develop coal-fired power projects on the east coast of Thailand (Figure 1), with
each of these proposed plants to be fueled entirely by imported coal. The proposed coal-fired power projects consist of Gulf Power Generation’s 734 MW Bo Nok Plant, Union Power Development’s 1400 MW Hin Krut Plant and BLCP Power’s 1347 MW Map Ta Phut Plant. The construction of these three plants, which has been delayed by the Asian economic crisis and ongoing environmental opposition, would increase Thailand’s coal-fired generating capacity by almost 3500 MW. If these coal-fired IPP projects are developed as currently scheduled (i.e. Bo Nok in 2003/2004, Hin Krut in 2004 and Map Ta Phut in 2006/2007), Thailand would experience a significant increase in import coal consumption over the next 2 - 5 years. The Bo Nok Station would be fueled with Indonesian coal, while the other two plants would likely burn Australian coal. However, continuing environmental opposition to power plant development in Thailand could further delay the startup of these coal-fired projects.
remainder is exported. Vietnam currently has three coal-fired power plants, Ninh Binh, Uong Bi and Pha Lai, each located around Hanoi in northern Vietnam (Figure 1). Figure 6 shows that through 2001, Vietnam’s coal-fired generating capacity remained constant at 645 MW. However, two 300 MW coal-fired units are currently being installed at the Pha Lai Station and several other coal-fired projects, such as the 300 MW Quang Ninh and 100 MW Thai Nguyen plants, have been proposed for development. The commissioning of the new units at Pha Lai in early 2002 and the construction of proposed new coal-fired power plants should significantly increase Vietnam’s domestic coal consumption in the next few years. Vietnam exports anthracite for cement and steel-making industries and power generation in countries with strict environmental regulations. The major export markets for Vietnamese anthracite are Japan, North Korea and Europe.
Vietnam
Coal production in the Philippines rebounded from a 6 year low of less than 1 million t in 2000 to 1.4 million t in 2001. A single open-pit operation (the Semirara Mining Corporation’s Unong Mine) located on the island of Semirara currently accounts for approximately 90% of the Philippines mostly sub-bituminous coal production. The balance of the country’s coal output is from a handful of small operations on Batan, Cebu, Mindanao and Negros. The state-run Philippine National Oil Company – Coal Corporation (PNOC-CC) is under a government mandate to increase domestic coal production in the coming years to reduce reliance on imported coal. Correspondingly, PNOC-CC plans to open three new underground coal mines on the island of Mindanao by 2003. These three operations would have a combined annual coal production capacity of over 0.5 million tpa. The consumption of Southeast Asian coals in the Philippines increased from 2.7 million t in 1996 to 3.9 million t in 2000. The Philippines consumes all of its domestically produced coal internally and also imports coal from Indonesian and nonSoutheast Asian suppliers (Australia and China) to fuel its eight coal-fired power plants and cement industry. Southeast Asian coals account for only approximately 40% of the Philippines’ total annual coal requirements, which reached 11 million t in 2001.
After several years of declining or stagnant coal production, Vietnam’s production of primarily anthracite-grade coals reached a record high of almost 13 million t in 2001. The country’s anthracite production is centered in Quang Ninh Province in northeastern Vietnam. Vietnam also produces minor amounts of lignite and coking coal for domestic consumption. The majority of Vietnam’s coal is produced by the state-owned mining company, Vinacoal. Vinacoal operates 29 surface mines and 13 underground mines. Six of Vinacoal’s surface coal mines have production capacities ranging from 0.8 to 2 million tpa, while five of the underground operations are capable of producing between 0.3 and 1 million tpa. Currently, surface mines account for approximately 60% of Vietnam’s total coal production, with the balance produced by underground mines. Both Vinacoal and foreign investors are evaluating new coal projects primarily in northern Vietnam, with the country’s coal production expected to increase to 16 million tpa by 2005. After falling to less than 5.5 million tpa during 1997 - 1999, Vietnam’s domestic coal consumption increased to almost 6.5 million t in 2000. For the last few years, Vietnam’s coal-fired power plants and industrial users have consumed over 60% of the country’s domestically produced coal, while the Reprinted from
World Coal • February 2003
Philippines
Coal-fired generating capacity in the Philippines increased from 1550 MW in 1996 to over 3800 MW in 2000. Major coalfired capacity additions included commissioning of the 600 MW Masinloc Station in 1998, commissioning of the 1218 MW Sual Station in 1999, and startup of the 440 MW Quezon Plant in 2000. However, this significant increase in Philippine coal-fired generating capacity has only had a muted impact on the country’s consumption of Southeast Asian coal, since much of this new capacity has been fueled with nonSoutheast Asian coals.
Malaysia
Malaysia’s production of primarily subbituminous coals increased from approximately 0.2 million t in 1996 to over 0.4 million t in 2001. The bulk of Malaysia’s coal production derives from the Global Minerals surface mine located in the Merit-Pila Coal Field of western Sarawak. Although the Merit Pila mine has a coal production capacity of 0.7 million tpa, the mine’s output is expected to remain constant at the 2002 level of 0.5 million tpa for the next few years. Although the Malaysian states of Sarawak and Sabah contain extensive coal resources, these coal deposits are generally located in remote and/or environmentally sensitive areas. Consequently, there is very little near-term development potential for new coal projects in Malaysia. Malaysia’s consumption of domestically produced coal and imported coal from other Southeast Asian nations (primarily Indonesia) increased from 2 million t in 1996 to 3 million t in 2000. Between 1996 - 2000, Malaysia’s two existing coal-fired power plants accounted for over 55% of the country’s total annual coal consumption. The bulk of Malaysia’s domestic coal production is consumed by the 100 MW Kuching power station in Sarawak, while imported coal, primarily from Indonesia, is used to fuel the Kapar coalfired power plant and supply industrial requirements. Since 2000, Malaysia’s use of coal for power generation has increased significantly. In 2001, the commissioning of two additional 500 MW units at the Kapar Power Station increased Malaysia’s annual coal consumption by over 2.5 million tpa. Malaysia’s import coal consumption is projected to increase by an additional 6 million tpa within the next two years as the 2100 MW Manjung coal-fired power station becomes fully operational. The
Second generation coal mining operation in South Kalimantan, Indonesia.
first unit of the 3x700 MW Manjung power station began commercial operation in September 2002, with the second unit scheduled to come online in February 2003 and the third to be operational by Q4 2003. Much of Malaysia’s increasing coal import requirements for the Kapar and Manjung stations will likely be met with Indonesian coals. On a longer-term basis, two coal-fired IPP projects are also scheduled for development in southern peninsular Malaysia within the next 4 - 7 years. The completion of these two coal-fired power projects, the 2100 MW Tanjung Bin Plant and the 1400 MW Jimah Station, will further increase Malaysia’s coal import requirements.
Laos
Laos currently produces lignite and anthracite from three mines located in the northwestern part of the country. Laos’ combined anthracite and lignite production increased from approximately 0.06 million t in 1996 to approximately 0.2 million t in 2001. The proposed development of the Hongsa lignite deposit to supply the Mae Moh power station in Thailand would significantly increase Laos’ annual lignite production. Domestic cement, steel and other industries currently consume all of Laos’ annual coal and lignite production. However, planned development of the Hongsa lignite deposit to fuel Thai power plants would result in Laos becoming a net coal exporter.
Myanmar
Myanmar currently produces limited amounts of sub-bituminous coal and lignite from small-scale surface mines locatReprinted from
World Coal • February 2003
ed primarily in the northern part of the country. A state-owned mining company, No. 3 Mining Enterprise, is responsible for the majority of Myanmar’s coal and lignite production. Currently, coal/lignite usage in Myanmar is limited to domestic cement, steel and other industry requirements. However, Myanmar has plans to construct a lignite-fired power plant in the country’s northeast that would be fueled from nearby lignite deposits.
Conclusion
To achieve more diversified energy mixes and satisfy growing domestic demand, many Southeast Asian nations are planning major additions of coal-fired generating capacity in the next 5 - 10 years. This increasing reliance on coal-fired power generation in most Southeast Asian countries, coupled with the increasing demand for steam and coking coals in world markets, will require significant increases in Southeast Asian coal/lignite production in the coming years.____________n
Note
All figures and graphs courtesy of Marston, Inc.
Sources
1. Indonesia Dept. of Mines & Energy and Directorate of Coal; Thailand National Energy Policy Office; The Institute of Energy Economics, Japan; ASEAN Centre for Energy; and Phillipines Dept. of Energy.
2. Indonesia Dept. of Mines & Energy and Directorate of Coal; Thailand National Energy Policy Office; The Institue of Energy Economics, Japan; ASEAN Centre for Energy; Phillipines Dept. of Energy; and IEA. 3. Indonesia Dept. of Mines & Energy and Directorate of Coal.
coal review
Donald L. Ewart Jr., Marston, Inc., US, examines the current situation in each of Southeast Asia’s
T
The Southeast Asia region encompasses the countries of Brunei, Indonesia, Kampuchea, Laos, Malaysia, Myanmar, Singapore, Thailand, Vietnam and the Philippines (Figure 1). Coal is currently produced in seven of the 10 Southeast Asian nations and is consumed to some degree in all of these countries except Brunei and Kampuchea. Indonesia and Vietnam are the only Southeast Asian countries that export coal. Coal is not currently produced in the countries of Brunei, Kampuchea and Singapore, while the remaining Southeast Asian countries all produce varying amounts of coal. Figure 1 shows that Indonesia, Malaysia, Vietnam and the Philippines produce primarily hard coals (i.e. anthracite, bituminous and subbituminous coals), while Thailand produces lignite only. Laos and Myanmar produce both hard coal and lignite. Figure 2 shows that combined coal production from the seven Southeast Asian coal-producing countries increased from approximately 83 million t in 1996 to almost 126 million t in 2001. This increase in regional coal output over the last 6 years was primarily attributable to the growth in Indonesian coal production, as the other Southeast Asian coal producers posted decreases or only modest increases in coal production over the same period. Coal production from the still developing Myanmar coal industry is currently less than 0.1 million tpa. Through 2001, Laos’s annual coal production has been less than 0.25 million tpa, while Malaysia has produced less than 0.5 million tpa. Historically, coal production from the Philippines has not exceeded 1.5 million tpa. Thailand and Vietnam both currently produce in excess of 10 million tpa of coal, while Indonesia’s current annual coal production exceeds 90 million tpa. Indonesia currently consumes less than 30% of its total annual coal production
coal producing countries.
Figure 1. Map showing the coal producing countries of Southeast Asia.
domestically, while Vietnam’s domestic coal consumption accounts for more than 60% of the country’s annual coal output. The Reprinted from
World Coal • February 2003
remaining Southeast Asian coal-producing nations consume all of their domestic coal production internally, with Malaysia, the
Figure 2. Southeast Asian coal production.1
Philippines and Thailand also requiring import coal to satisfy domestic demand. Figure 3 shows that consumption of Southeast Asian coals has increased from 80 million t in 1996 to almost 110 million t in 2000. Historically, more than 50% of the coals produced by Southeast Asian countries have been consumed within the region, with the remainder being exported to markets in Japan, Central Asia, Europe and the Americas. Power generation represents the primary coalconsuming sector in most Southeast Asian countries.
Indonesia
Figure 2 shows that coal production in the Southeast Asian region is dominated by Indonesia, which ranks eighth in terms of world coal production. Since 1996, Indonesia’s annual coal production has increased by over 40 million tpa (80%), with production levels increasing from 50 million t in 1996 to over 91 million t in 2001. Indonesia currently produces bituminous and sub-bituminous rank coals from more than 35 different mines in East Kalimantan, South Kalimantan and Sumatra. Almost all of Indonesia’s coal production is derived from open-pit mines, with only three small underground mines currently in operation. The locations of the major Indonesian coal mines are shown in Figure 4. Coal production in Indonesia is from: l The state-owned enterprise PT Tambang Batubara Bukit Asam (PTBA). l Holders of Coal Contracts of Work (CCoW) or ‘Coal Contractors’. l Mining Authorisation (or KP) Holders. l Co-operative Units (KUDs).
Figure 3. Consumption of Southeast Asian coals.2
There are three generations of actively producing coal contractors in Indonesia with different ownership, royalty and tax provisions applying to each generation. In 2001, there were 10 producing first generation coal contractors in Indonesia, five producing second generation coal contractors, and five producing third generation coal contractors. Additionally, 10 KP Holders and five KUDs produced coal during 2001. Recent trends in Indonesian coal production by producer-type are depicted in Figure 5. The Figure shows that first generation coal contractors account for the bulk of Indonesian coal production. In 2001, they accounted for almost 75% of Indonesia’s total coal production. The largest first generation coal contractors are PT Adaro Indonesia (which produced 18.1 million t of coal in 2001), PT Kaltim Prima Coal (2001 coal production of 15.5 million t), PT Kideco Jaya Agung (10.4 million t), and PT Arutmin Indonesia (9.5 million t).
Adaro and several other first generation contractors are jointly owned by foreign and domestic interests. Arutmin has recently become 100% Indonesian-owned, while Kaltim Prima Coal (KPC) and Kideco are in the process of divesting a share of their ownership to Indonesian investors, as required by the terms of their respective CCoWs. In fact, KPC has been involved in a protracted dispute with the Indonesian government regarding the purchase price for a share of the company. Although only accounting for 8% of 2001 coal production (Figure 5), Indonesia’s second and third generation coal contractors are expected to account for an increasing share of total Indonesian coal production as currently developing mines reach full capacity and proposed new coal projects come online. Second generation contractors PT Gunung Bayan Pratama Coal and PT Jorong Barutama Greston are scheduled to significantly increase coal
First generation coal contractor mining operation in East Kalimantan, Indonesia. Reprinted from
World Coal • February 2003
Indonesia’s coal-fired electric generating capacity has more than doubled in the last six years, increasing from less than 3000 MW in 1996 to almost 7500 MW in 2001. Major additions to Indonesia’s coal-fired generating capacity since 1996 include:
l The construction of three 600 MW units at the Suralya Power Station in 1997 – 1998. l The commissioning of units 7 and 8 of the Paiton Independent Power Producer (IPP) Project in 1999 (1230 MW). l The startup of the 130 MW AsamAsam Power Station in 2000. l The commissioning of Units 5 and 6 of the Paiton IPP Project in 2000 (1220 MW).
Figure 4. Approximate locations of coalfields and mines of Indonesia.
production at their developing Bayan and Jorong mines shortly, while several other currently operating second generation contractors have the potential to significantly expand coal production within the next few years. Also, the recent opening of PT Lanna Harita Indonesia’s Muara Badak Mine is expected to increase coal production from third generation contractors by at least 1.2 million tpa. Additionally, several new second and third generation contractor coal mines are projected to be developed by 2005. The Mandiri, Kartika, and Riau Baraharum coal projects (Figure 4) are all currently in the construction phase, while feasibility studies are being performed for the Nusa project and several other third generation concession areas. One of the major issues facing the Indonesian coal industry is illegal mining. In addition to the loss of revenue to legitimate coal concession holders, past and ongoing illegal coal mining operations in
Figure 5. Indonesian coal production.3
Indonesia, especially in South Kalimantan, have created serious environmental liabilities. The costs of mitigating this environmental damage will have to be absorbed by either legitimate coal producers or the government. The extensive illegal mining that occurred on the Arutmin Coal Concession may well have influenced BHP Billiton’s recent decision to sell its entire share of the operation to Indonesian investors. Figure 3 shows that Indonesia is not only the largest Southeast Asian coal producer, it has also become the largest consumer of Southeast Asian coal. Between 1996 2000, Indonesia’s domestic coal consumption doubled from 11 to 22 million tpa. This increase in coal consumption is largely attributable to the growing demand for electricity in Indonesia and the country’s increasing reliance on coal-fired power generation to meet this heightened demand. Figure 6 depicts the increase in Southeast Asian coal-fired generating capacity over the last six years. The Figure shows that
Indonesia exports a wide variety of bituminous and sub-bituminous steam coals, primarily from mines in Kalimantan. The primary export markets for Indonesian steam coals are Taiwan, Japan, South Korea, Europe, India and several Southeast Asian countries (i.e. the Philippines, Malaysia and Thailand). Indonesia is also the only exporter of ultra-low sulphur sub-bituminous coals, with these coals gaining increased acceptance in Asian markets.
Thailand
Between 1997 - 2000, Thailand’s annual lignite production dropped more than 5.5 million tpa from a peak production level of over 23 million t in 1997 to less than 18 million t in 2000. This decline in lignite production was directly attributable to the reduced demand for energy and cement caused by the Asian economic crisis. In 2001, Thailand’s lignite production rebounded slightly to almost 20 million t. Over 75% of Thailand’s total annual lignite production comes from a single operation, the Mae Moh surface mine, located in northern Thailand. All lignite produced from the Mae Moh Mine is consumed by
Figure 6. Southeast Asian coal-fired generating capacity. Reprinted from
World Coal • February 2003
The recently commissioned Asam-Asam Power Station in South Kalimantan, Indonesia.
the mine-mouth Mae Moh power station. Thailand’s remaining lignite production is derived from a handful of small to medium-sized surface mines located primarily in the northern part of the country. The three major lignite producers in Thailand are the Electric Generating Authority of Thailand (EGAT), Banpu Public Company Limited (Banpu), and Lanna Resources Public Co., Ltd (Lanna Resources). EGAT, which operates the Mae Moh surface mine in northern Thailand, accounted for 78% of Thailand’s 2001 lignite production. Banpu and Lanna Resources currently operate two lignite mines each, with these four operations accounting for approximately 20% of Thailand’s 2001 lignite output. EGAT has plans to develop the Wiang Haeng lignite deposit in northwest Thailand within the next few years. Due to its relatively higher heat content and lower sulphur content, Wiang Haeng lignite will be used to supplement lignite production from the Mae Moh Mine. Figure 3 shows that Thailand’s consumption of domestically produced lignite and imported coal from other Southeast Asian countries (primarily Indonesia) declined over the 1996 - 2000 period; decreasing from a high of 26 million t in 1997 to 20 million t in 2000. Thailand currently has one lignite-fired power plant, the 2625 MW Mae Moh power station, which consumes over 75% of the country’s total lignite production. The remainder of Thailand’s lignite production, plus an increasing amount of imported coal (more than 4 million t in 2000), are consumed by domestic cement, steel and pulp and paper industries. Figure 6 shows that Thailand did not install any additional coal-fired generating capacity during 1996 - 2001. However, three separate IPP consortiums have plans to develop coal-fired power projects on the east coast of Thailand (Figure 1), with
each of these proposed plants to be fueled entirely by imported coal. The proposed coal-fired power projects consist of Gulf Power Generation’s 734 MW Bo Nok Plant, Union Power Development’s 1400 MW Hin Krut Plant and BLCP Power’s 1347 MW Map Ta Phut Plant. The construction of these three plants, which has been delayed by the Asian economic crisis and ongoing environmental opposition, would increase Thailand’s coal-fired generating capacity by almost 3500 MW. If these coal-fired IPP projects are developed as currently scheduled (i.e. Bo Nok in 2003/2004, Hin Krut in 2004 and Map Ta Phut in 2006/2007), Thailand would experience a significant increase in import coal consumption over the next 2 - 5 years. The Bo Nok Station would be fueled with Indonesian coal, while the other two plants would likely burn Australian coal. However, continuing environmental opposition to power plant development in Thailand could further delay the startup of these coal-fired projects.
remainder is exported. Vietnam currently has three coal-fired power plants, Ninh Binh, Uong Bi and Pha Lai, each located around Hanoi in northern Vietnam (Figure 1). Figure 6 shows that through 2001, Vietnam’s coal-fired generating capacity remained constant at 645 MW. However, two 300 MW coal-fired units are currently being installed at the Pha Lai Station and several other coal-fired projects, such as the 300 MW Quang Ninh and 100 MW Thai Nguyen plants, have been proposed for development. The commissioning of the new units at Pha Lai in early 2002 and the construction of proposed new coal-fired power plants should significantly increase Vietnam’s domestic coal consumption in the next few years. Vietnam exports anthracite for cement and steel-making industries and power generation in countries with strict environmental regulations. The major export markets for Vietnamese anthracite are Japan, North Korea and Europe.
Vietnam
Coal production in the Philippines rebounded from a 6 year low of less than 1 million t in 2000 to 1.4 million t in 2001. A single open-pit operation (the Semirara Mining Corporation’s Unong Mine) located on the island of Semirara currently accounts for approximately 90% of the Philippines mostly sub-bituminous coal production. The balance of the country’s coal output is from a handful of small operations on Batan, Cebu, Mindanao and Negros. The state-run Philippine National Oil Company – Coal Corporation (PNOC-CC) is under a government mandate to increase domestic coal production in the coming years to reduce reliance on imported coal. Correspondingly, PNOC-CC plans to open three new underground coal mines on the island of Mindanao by 2003. These three operations would have a combined annual coal production capacity of over 0.5 million tpa. The consumption of Southeast Asian coals in the Philippines increased from 2.7 million t in 1996 to 3.9 million t in 2000. The Philippines consumes all of its domestically produced coal internally and also imports coal from Indonesian and nonSoutheast Asian suppliers (Australia and China) to fuel its eight coal-fired power plants and cement industry. Southeast Asian coals account for only approximately 40% of the Philippines’ total annual coal requirements, which reached 11 million t in 2001.
After several years of declining or stagnant coal production, Vietnam’s production of primarily anthracite-grade coals reached a record high of almost 13 million t in 2001. The country’s anthracite production is centered in Quang Ninh Province in northeastern Vietnam. Vietnam also produces minor amounts of lignite and coking coal for domestic consumption. The majority of Vietnam’s coal is produced by the state-owned mining company, Vinacoal. Vinacoal operates 29 surface mines and 13 underground mines. Six of Vinacoal’s surface coal mines have production capacities ranging from 0.8 to 2 million tpa, while five of the underground operations are capable of producing between 0.3 and 1 million tpa. Currently, surface mines account for approximately 60% of Vietnam’s total coal production, with the balance produced by underground mines. Both Vinacoal and foreign investors are evaluating new coal projects primarily in northern Vietnam, with the country’s coal production expected to increase to 16 million tpa by 2005. After falling to less than 5.5 million tpa during 1997 - 1999, Vietnam’s domestic coal consumption increased to almost 6.5 million t in 2000. For the last few years, Vietnam’s coal-fired power plants and industrial users have consumed over 60% of the country’s domestically produced coal, while the Reprinted from
World Coal • February 2003
Philippines
Coal-fired generating capacity in the Philippines increased from 1550 MW in 1996 to over 3800 MW in 2000. Major coalfired capacity additions included commissioning of the 600 MW Masinloc Station in 1998, commissioning of the 1218 MW Sual Station in 1999, and startup of the 440 MW Quezon Plant in 2000. However, this significant increase in Philippine coal-fired generating capacity has only had a muted impact on the country’s consumption of Southeast Asian coal, since much of this new capacity has been fueled with nonSoutheast Asian coals.
Malaysia
Malaysia’s production of primarily subbituminous coals increased from approximately 0.2 million t in 1996 to over 0.4 million t in 2001. The bulk of Malaysia’s coal production derives from the Global Minerals surface mine located in the Merit-Pila Coal Field of western Sarawak. Although the Merit Pila mine has a coal production capacity of 0.7 million tpa, the mine’s output is expected to remain constant at the 2002 level of 0.5 million tpa for the next few years. Although the Malaysian states of Sarawak and Sabah contain extensive coal resources, these coal deposits are generally located in remote and/or environmentally sensitive areas. Consequently, there is very little near-term development potential for new coal projects in Malaysia. Malaysia’s consumption of domestically produced coal and imported coal from other Southeast Asian nations (primarily Indonesia) increased from 2 million t in 1996 to 3 million t in 2000. Between 1996 - 2000, Malaysia’s two existing coal-fired power plants accounted for over 55% of the country’s total annual coal consumption. The bulk of Malaysia’s domestic coal production is consumed by the 100 MW Kuching power station in Sarawak, while imported coal, primarily from Indonesia, is used to fuel the Kapar coalfired power plant and supply industrial requirements. Since 2000, Malaysia’s use of coal for power generation has increased significantly. In 2001, the commissioning of two additional 500 MW units at the Kapar Power Station increased Malaysia’s annual coal consumption by over 2.5 million tpa. Malaysia’s import coal consumption is projected to increase by an additional 6 million tpa within the next two years as the 2100 MW Manjung coal-fired power station becomes fully operational. The
Second generation coal mining operation in South Kalimantan, Indonesia.
first unit of the 3x700 MW Manjung power station began commercial operation in September 2002, with the second unit scheduled to come online in February 2003 and the third to be operational by Q4 2003. Much of Malaysia’s increasing coal import requirements for the Kapar and Manjung stations will likely be met with Indonesian coals. On a longer-term basis, two coal-fired IPP projects are also scheduled for development in southern peninsular Malaysia within the next 4 - 7 years. The completion of these two coal-fired power projects, the 2100 MW Tanjung Bin Plant and the 1400 MW Jimah Station, will further increase Malaysia’s coal import requirements.
Laos
Laos currently produces lignite and anthracite from three mines located in the northwestern part of the country. Laos’ combined anthracite and lignite production increased from approximately 0.06 million t in 1996 to approximately 0.2 million t in 2001. The proposed development of the Hongsa lignite deposit to supply the Mae Moh power station in Thailand would significantly increase Laos’ annual lignite production. Domestic cement, steel and other industries currently consume all of Laos’ annual coal and lignite production. However, planned development of the Hongsa lignite deposit to fuel Thai power plants would result in Laos becoming a net coal exporter.
Myanmar
Myanmar currently produces limited amounts of sub-bituminous coal and lignite from small-scale surface mines locatReprinted from
World Coal • February 2003
ed primarily in the northern part of the country. A state-owned mining company, No. 3 Mining Enterprise, is responsible for the majority of Myanmar’s coal and lignite production. Currently, coal/lignite usage in Myanmar is limited to domestic cement, steel and other industry requirements. However, Myanmar has plans to construct a lignite-fired power plant in the country’s northeast that would be fueled from nearby lignite deposits.
Conclusion
To achieve more diversified energy mixes and satisfy growing domestic demand, many Southeast Asian nations are planning major additions of coal-fired generating capacity in the next 5 - 10 years. This increasing reliance on coal-fired power generation in most Southeast Asian countries, coupled with the increasing demand for steam and coking coals in world markets, will require significant increases in Southeast Asian coal/lignite production in the coming years.____________n
Note
All figures and graphs courtesy of Marston, Inc.
Sources
1. Indonesia Dept. of Mines & Energy and Directorate of Coal; Thailand National Energy Policy Office; The Institute of Energy Economics, Japan; ASEAN Centre for Energy; and Phillipines Dept. of Energy.
2. Indonesia Dept. of Mines & Energy and Directorate of Coal; Thailand National Energy Policy Office; The Institue of Energy Economics, Japan; ASEAN Centre for Energy; Phillipines Dept. of Energy; and IEA. 3. Indonesia Dept. of Mines & Energy and Directorate of Coal.
