MAC: Mines and Communities

Export - and profit

Published by MAC on 2001-05-01

Export - and profit

Kaltim Prima's reserves are vast - originally calculated at just under a quarter of the entire coal found in Kalimantan [Mining Journal May 5 1989]. Even the "test" consignment, exported by KPC in May 1990 to the Netherlands, Germany, Taiwan and Japan [Financial Times August 7 1991, Mining Magazine October 1991] was - at 67,000 tonnes - the largest coal shipment ever to leave the country at that time [Engineering and Mining Journal, USA, October 1991]. The following year, KPC's first commercial sales were made to Hong Kong (China Power and Light) - causing "a considerable stir, since the delivery price was set well below contracted sales for Australian coal to Japan" [Mining Magazine Oct 1991]. By the end of 1992, output had exceeded the design specification of 7 million tonnes, and was well on the way to 9 million tonnes a year [Northern Miner, Toronto, May 31 1993]. Within two years it had risen to 11.5 million tonnes [SAML (Southeast Asia Mining Letter), London, October 11 1996]. 1998 output was 14.7 million tonnes, of which around 70% was sold on long term contracts and the remainder (30%) on spot contracts [Rio Tinto Annual Report and Accounts, London and Melbourne 1998]. Again, the biggest proportion (32%) went to Japan (primarily Chugoku power company) followed by Taiwan (24%) and Hong Kong (China Power and Light - 12%) [Australian Financial Review December 9 1998, and Financial Times December 9 1998]. The remainder was shipped to Europe of which 12% went primarily to Germany (Strom Meyer), to the Netherlands' (GKE) and Italy. US customers received 7% (one of these being Sprague Energy [International Coal Report, November 16 1998]. Other Asian buyers (including the Philippines) took 4%, and the remainder was retained in Indonesia itself. Noteworthy about these contracts is that Kaltim Prima - whatever its claims to be providing "enviro coal" (a name some company whizz-kid coined for it in the early 1990's) to power stations with high standards of pollution control in North America and Europe - seems to be failing less industrialised countries closer to "home". What has happened to Thailand for example, which signed a joint coal agreement with the Indonesian government a decade ago [Indonesian Development News May/June 1990], and whose exploited domestic coal resources consist of brown coal, rather than less environmentally damaging hard coal? This discrepancy was true even before the drop in Asian demand that followed the "crisis" caused by grotesque currency speculation and corrupt funding of mega-projects up to 1997 [Financial Times January 30 1998].

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