NU Religious Organization Will Obtain Ex-Mining Concession from BUMI's Subsidiary

Jakarta,- The news about granting mining permits to community organizations (ormas) continues to heat up.

Most recently, the Minister of Investment or Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia, said that Nahdlatul Ulama (NU) would later obtain mines from the former (ex) reduced Special Mining Business Permit Area (WIUPK) belonging to PT Kaltim Prima Coal (KPC).

KPC itself is a subsidiary of PT Bumi Resources Tbk (BUMI), which is a coal business owned by the Bakrie Group and the Salim Group.

"Regarding large areas, one of the people who wants to explain the gift to PBNU is the former KPC. Just write, don't be shy," said Bahlil at a press conference at his office, Friday (7/6/2024).

Unfortunately, Bahlil did not clearly state how much area and production NU would get from the former KPC-managed mine.

PBNU Chairman KH Yahya Cholil Staquf (Gus Yahya) said NU had also prepared a PT to manage the mine.

"God willing, we have prepared the design. This includes the design, we will create a cooperative whose members are residents, and then join NU as an association to create a PT," said Gus Yahya, Thursday (6/6/2024).

KPC's Sangatta coal mine is the largest mine in Indonesia and one of the largest open-pit mines in the world.

Since January 1, 2022, KPC has had a Special Mining Business Permit (IUPK) from the Indonesian government to carry out coal exploration, production and marketing in an area of ​​61,543 hectares in Sangatta and Bengalon, East Kutai Regency, East Kalimantan Province.

Overall, according to the Ministry of Finance, BUMI is one of the largest contributors to coal royalties that enter the state treasury, in line with its position as the largest producer.

Each year it produces around 80-85 million tons, much larger than similar companies. In 2018, BUMI was named the Largest PNBP Payer in Indonesia. 

Production from KPC alone covers around 70 percent of BUMI's coal production.

Previously, in 2017, BUMI was also named as the company that provided the largest PNBP with a value of more than IDR 9 trillion. 

For information, the Ministry of Energy and Mineral Resources (ESDM) reported that Indonesia's realized black gold production will reach 775 million tons in 2023.

The figure is up 12.8 percent compared to 2022, aka year-on-year (yoy), as well as becoming a new highest production record. (See graphic below.)

 In 2023, KPC recorded total coal production (ready to sell) from the Sangatta and Bengalon mines reaching 53.6 million tonnes, an increase of 9 percent from 49.2 million tonnes in 2022. This production is supported by coal processing and delivery facilities with capacity of 60 million tons by the end of 2023

KPC targets the company's coal production to reach 53.5 million tons in 2024.

This is in line with the Performance Plan and Budget (RKAB) for the 2024-2026 period which has been approved by the Ministry of Energy and Mineral Resources.

KPC produces four types of coal, namely prime which is superior quality coal with high calories, has very low ash content and medium sulfur content with low moisture.

Furthermore, areca palm coal has lower calories with a higher moisture level.

There is also the Melawan type, a sub-bituminous coal with low sulfur and ash content, and high moisture levels.

Meanwhile, the fourth is the KPC 4200 type, a sub-bituminous coal with lower calories than Melawan, low sulfur and ash content, and high moisture levels.

In particular, KPC's Sangatta mine produces bituminous and subbituminous coal, which is located close to port facilities in Tanjung Bara. This location is connected to the mine site via an overland conveyor (OLC) 13 kilometers long.

The existence of a second OLC line and improvements to barge loading facilities will support increased production from the KPC mine in the coming years.

The Bengalon mine also produces bituminous type coal which is located close to the coast and is connected to port facilities via a road of approximately 25 km.

This location close to the port provides benefits for KPC, one of which is efficiency in transportation costs from the mine site to the port location.

According to the company's official website, in 1970, this company started as an investment from Rio Tinto Indonesia which was owned by Conzinc Rio Tinto Australia (CRA) together with British Petroleum (BP) to collaborate in coal exploration activities in Indonesia.

Then in 1978, the Indonesian government invited foreign companies to tender for coal exploration in East Kalimantan and South Kalimantan.

Entering the era of 1982, PT Kaltim Prima Coal (KPC) signed a Coal Concession Work Agreement (PKP2B) with Perum Tambang Batu Bara, which is now known as PT Tambang Batu Bara Bukit Asam (PTBA), representing the Indonesian government. The agreement covers exploration, production and marketing activities.

Then from 2000 to 2018, BUMI acquired KPC shares in 2003.

KPC continues to grow where in 2003, KPC production reached 16.4 million tons of coal, and in 2018 it reached 56.97 million tons.

The company then bought 100 percent of the shares in KPC, which is the largest coal producer in Indonesia, after acquiring Sangatta Holdings Ltd (SHL) and Kalimantan Coal Ltd. (KCL).

The Company is the largest owner of coal reserves and resources in Indonesia, with respective capacities of 2.5 billion metric tons (MT) and 8.5 billion MT, bringing the total to 11 billion MT.

KPC manages the Bakrie Group's coal production together with PT Arutmin Indonesia (Arutmin) and with PT Pendopo Energi Batubara. 

Sources : Jun 13.24

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