Govt rejects E. Kalimantan?s plan to lower coal production

The energy and mineral resources ministry will reject the East Kalimantan administration?s plan to reduce coal production because the policy would not only affect the coal supply in the domestic market but also the country?s foreign exchange earnings from coal exports, Kontan reported on Thursday.

The ministry?s director general of coal and mineral, Thamrin Sihite, said in Jakarta on Wednesday that the plan to reduce coal production should be approved by the House of Representatives because it would affect the national coal policy.

?They have formally submitted the proposal to lower coal production, but it is difficult to fulfill. As, it affects the national policy, it should need approval from the House,? he said.

On Jan 25, the governor of East Kalimantan Awang Faroek issued a circular letter No.180/1375-HK/2013 to the province?s regents and mayor urging them to stop new permits for mining operations and plantations. The moratorium will be imposed for a year to help reduce the degradation of the environment.

In addition to the moratorium, the governor has also sent a letter to the energy and mineral resources ministry to request for a reduction in the province?s coal production to 150 million tons a year from the initial plan of 220 million tons.

Thamrin said that the cut in coal production in East Kalimantan, would severely affect the national coal production because the larger part of the coal production came from the province. He acknowledged that East Kalimantan and other producing provinces such as South Kalimantan, West Kalimantan and South Sumatra had the rights to propose the level of their annual coal production.

The final decision however should be made by the central government because it would affect not only the domestic supply but also foreign exchange earnings from exports, he added. (*)