Coal For The Nation

ICMA WEBSITES – EDITORIAL (18 AUGUST 2020)

Coal For The Nation

Indonesia is celebrating the nation 75th Independence Day with little fanfare as the Pandemic Covid-19 is still looming. In fact, Indonesia is bracing for the possible recession, the worst the country has seen in several decades. All industries including are badly impacted by the weak demand due to the outbreak of Covid-19. Coal price just hit its lowest price level in the decade and there is a huge concern on the possibility of further fall of the price below $ 50 tonne. Despite the unfortunate situation, the industry remains a significant contributor to the state economy as well as the energy security. Therefore, in the future coal is likely to play even greater role to help the nation.

As many nations including Indonesia have been moving transforming their energy policies to cleaner energy sources or renewable, coal remains the most affordable primary energy. China and India remains the highest coal producers as well as the biggest consumption of the commodity. Indonesia as the World’s biggest thermal coal exporter (in term of volume) is still very dependable on the commodity. The country’s energy mix (as stipulated in the National Energy Policy) projects coal continues to be the most dominant primary energy sources until 2045. In the  2019-2028 Business Development Strategic Plan (RUPTL) of PLN, coal is projected to accounts of roughly 58% of the country’s power generation. With the relatively abundant coal reserves, which are estimated to last at least until next 70 years, coal will play greater role ahead as the primary source for the country’s energy security. At least, in the two decades or so, coal will still be dominant to support the nation development.

In terms of economic contribution, in the mineral and coal sector, the coal subsector industry contributes roughly 80% of the non-tax state revenues (PNBP) as compared to 20% from the mineral subsector industry. This is quiet a significant contribution not to mention coal miners’s contribution to the state coffers through income tax payments such as corporate income tax, withholding tax, and even the land and property tax. In addition, coal miners help regional economies through payment of local taxes and through the allocation fund from royalties payment. Miners also provide important support for local communities through development and empowerment of the community program (PPM) as part of the commitment to support sustainable development.

With these contribution and the strategic position of coal to the nation’s economy and energy security, the coal industry needs support from Indonesian people. Support from the government is highly expected on the constructive policies and regulatories. While society should possess greater awareness of the importance of the commodity to the nation. This is a huge task to socialize and to educate society on the significant role of the industry to the nation. This is not solely the role of the government and industry but all element of the society. If the industry prosper, the country and its people will enjoy the greater benefit as mandated under the 1945 Constitution. MERDEKA.    

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