Report on Coal Mine Development

and Transport Infrastructure in

Kalimantan

JOGMEC

Summary

Indonesia is the world's largest coal exporter in 2018 and the second-largest coal trade

partner for Japan after Australia. In 2018, Indonesian coal accounted for 15% (28.9 million

tons) of total coal imports in Japan.

Japan mainly imports steam coal from Indonesia and relatively high calorific value

bituminous coal among Indonesian coal. The high calorific value bituminous coal is reserved

and mined in Kalimantan Island. The production and export of high-grade bituminous coal

in the conventional coal mines in the coastal areas are decreasing due to resource constraints.

And in the future, the supply source of the high-grade bituminous coal will move to the inland

Kalimantan Island.

Transport infrastructure developments are indispensable for coal mine developments and

the stable operations in inland areas of Kalimantan Island. Many coal mines in inland

Kalimantan use coal transportation systems with barges. It is costly to operate barges because

the rivers are narrow and shallow in the upstream. Furthermore, it is impossible to operate

barges in the dry season in some areas due to the shallow water depth. In addition to these

existing issues, new mines far from the rivers need long-haul road accesses to the closest river

as the coal production shifts to inland Kalimantan.

The Indonesian government has recognized the issues in the coal transports for long years.

The developments of infrastructures such as roads, ports, or rails have been planned but have

not progressed yet.

Stable and economical coal transportations in the inland area are the key to coal resource

developments in inland Kalimantan. The resilient coal transportations make coal mine

developments possible, and Japan would enjoy coal supply from Indonesia.

The main objective of this study is to provide Japanese companies with useful information

that supports decision-making in investments into coal resources in Kalimantan. This study

investigated the current status of infrastructure developments, the factors that hindered the

infrastructure developments, and the coal transportation costs in inland Kalimantan.

This study describes the problems in coal transportation in the inland Kalimantan as

quantitatively as possible.

The Indonesian government aims to preserve coal resources to meet future domestic coal

demand, and the BAPPENAS announced that the upper limit of coal production should be

400 million tons in the "Mid-term National Development Plan." It said that Indonesia would

export the coal that leftover. Among the several coal export forecasts, DEN, which forecasts

the smallest amount of coal export, shows that coal production and domestic coal consumption

will be the same in 2046, and the net coal exports will become 0. (Fig. 1)

Fig. 1 Indonesian Coal Consumption and Export Outlook

Inland Kalimantan Island, ultra-high calorific coal exists in the following four regions (Fig. 2)

1 The northern area of upstream Barito River: The northeastern part of the Barito River, a

region with many mining areas that have not yet started their mining operations.

2 East Kalimantan/Central Kalimantan border: The border between East Kalimantan and

Central Kalimantan, the eastern part of the upper Barito River

3 Eastern area of Kapuas River: The region between the Kapuas River and the Barito River.

4 Lower Kedang Pahu River: The area where the Kedang Pahu River joins the Mahakam River.

These four areas have the potential to be developed in the future.

There are many mining concessions (IUPs) that have not started production in both East

Kalimantan Province and Central Kalimantan Province.

The government of East Kalimantan would not grant new concessions because it likes to have

existing inactive IUPs developed first. Mining companies should find a candidate from

existing IUPs. In Central Kalimantan province, mining companies should participate in a

bidding to have a new IUP, but it is not necessary to participate in it if they acquire an existing

IUP.

Fig. 2 Distribution of coal

Mines located around upstream of the Barito River use barges for coal transportation through

the Barito River and are subject to water depth restrictions on barge transportation. Only

small barges can go down the Barito River even in the rainy season, and in the dry season,

barges can go down the river only when the water depth increases after rainfall. (Fig. 3)

The downstream of the Barito River, which has a large transport capacity, would not be a

constraint for coal transports.

Fig.3 Daily Water level at Muara Teweh (2018-2019)

Mines in the upstream of the Mahakam River use the Mahakam River for coal transports.

Mines can use barges even in the dry season. But there are restrictions on the sizes of barges

due to the shallow water depth. (Fig. 4) In some Jettys, mines should reduce the load in the

dry season due to the shallower water depth than the rainy season (e.g. Barges from Kedap

Sayaaq Jetty reduces the load in the dry season). (Fig. 5)

Fig.4 Barge loadage by seasons

Max. Ave. Min. Max. Ave. Min.

BINA INSAN SUKSES MANDIRI 31 220,500 7,500 7,113 5,500 39 281,700 7,500 7,223 5,300

HARINDO WAHANA 3 16,050 5,500 5,350 5,250 5 26,754 5,400 5,351 5,254

KEDAP SAYAAQ 1 7,500 7,500 7,500 7,500 6 40,600 7,500 6,767 5,300

BUMI DHARMA KENCANA 7 38,700 7,500 5,529 5,200

sub-total 35 244,050 7,500 6,973 5,250 57 387,754 7,500 6,803 5,200

TRUBAINDO COAL MINING 80 615,132 9,200 7,689 4,000 141 1,076,280 9,200 7,633 4,000

GUNUNG BARA UTAMA 21 146,338 8,500 6,968 2,904 36 269,600 7,500 7,489 7,100

TEGUH SINAR ABADI 42 307,400 8,000 7,319 4,500 34 254,100 8,000 7,474 5,700

sub-total 143 1,068,870 9,200 7,475 2,904 211 1,599,980 9,200 7,583 4,000

JEMBAYAN MUARA BARA 84 693,600 10,500 8,257 7,500 69 582,606 10,020 8,444 5,306

MAHAKAM SUMBER JAYA 58 435,000 7,700 7,500 7,000 72 511,900 7,700 7,110 6,250

MULTI HARAPAN UATAMA 42 336,150 10,500 8,004 7,350 83 609,580 8,350 7,344 5,200

KAYAN PUTRA UTAMA COAL 31 262,450 10,000 8,466 7,500 16 134,050 10,000 8,378 7,000

KITADIN CORPORATION 15 112,190 8,000 7,479 7,280 20 149,360 7,700 7,468 7,280

MAHAKAM COAL TERMINAL 12 86,100 7,500 7,175 5,300 21 156,300 7,500 7,443 7,000

SEGERA HERO SAKTI 10 70,000 7,000 7,000 7,000 22 160,000 7,500 7,273 5,000

TANITO HARUM 5 38,500 7,700 7,700 7,700 11 75,500 7,500 6,864 6,000

GERBANG DAYA MANDIRI 4 31,000 8,000 7,750 7,500 3 22,300 7,500 7,433 7,300

KUTAI BARA ABADI 1 7,500 7,500 7,500 7,500 3 22,500 7,500 7,500 7,500

INSANI BARA PERKASA 1 5,000 5,000 5,000 5,000 2 12,800 7,500 6,400 5,300

PRIMA MITRA JAYA MANDIRI 1 3,000 3,000 3,000 3,000

RENCANA MULIA BARATAMA 3 22,500 7,500 7,500 7,500

ALAM PERMAI ARTHA UTAMA 1 5,500 5,500 5,500 5,500

BUKIT MENJANGAN LESATRI 1 5,500 5,500 5,500 5,500

KSU KARYA DESA 8 59,500 7,500 7,438 7,000

BERKAT CAHAYA DELIMA 7 52,500 7,500 7,500 7,500

KIMCO ARMINDO 3 22,500 7,500 7,500 7,500

sub-total 269 2,113,990 10,500 7,859 3,000 340 2,571,396 10,020 7,563 5,000

ANUGERAH BARA KALTIM 71 550,900 8,000 7,759 5,500 121 897,300 7,500 7,416 5,300

ALAM JAYA BARA PRATAMA 58 409,940 7,650 7,068 5,130 78 570,500 7,500 7,314 5,000

INDO PERKASA 40 293,399 10,500 7,335 2,500 83 579,200 10,500 6,978 2,500

MEGA PRIMA PERSADA 13 97,350 7,850 7,488 7,300 19 132,850 7,510 6,992 5,000

BARA KUMALA SAKTI 18 96,300 7,600 5,350 3,400 44 286,100 7,800 6,502 2,800

STS MUARA BERAU 3 22,500 7,500 7,500 7,500

TRANSISI ENERGY SATU NAMA 1 5,200 5,200 5,200 5,200

BUKIT BAIDURI ENERGI 11 82,500 7,500 7,500 7,500

sub-total 204 1,475,589 10,500 7,233 2,500 356 2,548,450 10,500 7,159 2,500

Northern area 147 831,017 7,600 5,653 1,702 157 830,362 7,550 5,289 225

Southern Area 311 1,905,748 9,500 6,128 1,963 318 2,074,241 9,500 6,523 100

sub-total 458 2,736,765 9,500 5,975 1,702 475 2,904,603 9,500 6,115 100

BANGUN OLAH SARANA SUKSES 10 35,000 3,500 3,500 3,500 9 28,240 3,373 3,138 2,747

GUNUNG BAYAN PRATAMA COAL 8 27,700 3,800 3,463 3,200

sub-total 18 62,700 3,800 3,483 3,200 9 28,240 3,373 3,138 2,747

BAYAN RESOURCES 262 1,713,950 8,000 6,542 3,100 327 1,953,158 8,000 5,973 3,100

FAJAR SAKTI PRIMA 58 350,595 8,500 6,045 550 8 60,450 8,250 7,556 5,200

sub-total 320 2,064,545 8,500 6,452 550 335 2,013,608 8,250 3,100

1,447 9,766,509 6,749 1,783 12,054,032 6,761

Belayan River

Kedang Kepala

River

Total

Uppermost

upstream

midstream

downstream

Mahakam

Delta

Kedang

Pahu River

Area Jetty

High-water-level season（Apr. 2018） Low-water-level season（Oct. 2018）

No.Total

transport（ton）

Loadage（ton／barge）No.

Totaltransport

（ton）

Loadage（ton／barge）

Fig. 5 Barge loadage by seasons at Kedap Sayaaq Jetty

Hulu Mahakam Bridge, old Mahakam Bridge, and Mahkota Bridge are close to Samarinda city.

There is a 4-hour per day time slot for passage under the bridge, and tugboat assistance is

required. Under certain assumptions*, the utilization rate of the transportation capacity under

the bridges is 65% as of October 2018. There would be room for additional transportation

capacity under the bridges.

* Assumed that it is possible to reduce the transit time under the bridge to 200 seconds/barge

from 300 seconds/barge, which is the actual average transit time.

Fig. 6 Transit loads by points of the Mahakam River

Coal mine developments in the upstream Barito River have constraints on coal transportation.

Some coal mines have plans to transport coal from Central Kalimantan across the border to

East Kalimantan and Mahakam River. It is up to whether the Governor of Central Kalimantan

permits coal transportation to East Kalimantan province. The Governor of Central

Kalimantan did not want the coal produced in the province transported through the other

provinces. No mine has carried the coal produced in Central Kalimantan via East Kalimantan.

With the same intention, the Central Kalimantan Government is planning to dredge the

shallow part of the Barito River so that the coal produced in the Central Kalimantan, which

currently goes down the Barito River in South Kalimantan, can pass through the Barito River

in Central Kalimantan.

There are the following restrictions on coal transportation.

The water depth of the Barito River in the upstream area (Fig.7) of Talio limits

the loading capacities of the barges up to 4,000 tons. The water depth decreases

in the upstream of Talio during the dry season and makes barges' traffic more

difficult. Barge transportations stop for five months in a year. Mines transport coal

by barges when the water level rises due to temporary rainfall in the dry season.

Mines construct intermediate stockpiles in the downstream area of Talio, where

the Barito River can accept barges over 8,000 tons load capacities, to mitigate the

obstacles in coal transports due to decreases in water level in the dry season.

However, mines cannot completely resolve the problems.

Mines have two critical measures to resolve the issues.

1. Some mines have plans to transport coal from Central Kalimantan to East

Kalimantan via the Mahakam River. Some plan land transportation to the

Bunyut Jetty on the Mahakam River, and another has a railway construction

across the border between the two provinces to Bara Tabang coal mine.

2. The other measure is to transport coal by means other than barges to the area

downstream of Talio.

Regarding the former measure, the coal transportation cost via the Mahakam

River is US$7.2/ton lower than the transportation cost through the Barito River.

While having economic advantages, this measure has a critical issue, a policy of

the Central Kalimantan Government. To transport coal from Central Kalimantan

to East Kalimantan by trucks, mines must obtain a road construction permit from

the Central Kalimantan Governor. But the Central Kalimantan Government has

not issued a construction permit, and mines have not transported coal produced

in the state via East Kalimantan.

Upon the latter measure, there have been some infrastructure development plans

at a standstill that would facilitate coal transportation from the upstream of the

Barito River to the downstream. We could not find any direct answer in the

interviews as to the reason for the issues. It is probably because the governments

lack funds, and the private sector hesitates to invest in the plans due to the

uncertain returns.

Fig. 7 Coal mining concessions in the upstream of the Barito River