"Saksikan tayangan kami Official Youtube IDX Channel di Program Fincast, Kamis (19/06/2024) dengan Tema Batu Bara dan Transisi Energi".
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00:00At the time of the crisis, we remember the crisis of the pandemic, the price of coal rose to the moon up to 300 dollars per ton, 400 dollars.
00:09It has been proven that coal is the most stable, the electricity.
00:12Sunset is perceived that this industry will soon be dark.
00:23Hello, Sobat Investor, how are you? My name is Wiky Adan.
00:25Back with you again at Fincast, your home of finance and investment.
00:29This time we will talk about the energy commodity, which of course has become a very interesting discussion lately.
00:36Especially when the narrative of renewable energy or maybe renewable energy is booming globally.
00:42And also one thing that is reduced to many programs in Indonesia.
00:50Regarding the use of fossil-based fuels, which are increasingly reduced in portions.
01:00In early 2024, the need for coal in Indonesia and the world is still very high.
01:05But in other words, the International Energy Agency in 2023 has announced a decrease in global coal demand by 2.3% in 2026 compared to the demand level in 2023.
01:20The government is still voicing the transition of energy to shift the need for coal nationally to renewable energy or EBT.
01:27Because the government also has a target related to the boom of renewable energy, which is also being pursued.
01:35From the point of view of the actors in the coal industry, we will discuss this with Mr. Hendra Sinadiab.
01:44He is the Executive Director of Indonesia Mining Association or IMA.
01:48How are you, Mr. Hendra? A big round of applause for Mr. Hendra.
01:53There is a clap here, but there is no form, sir.
01:57Thank you.
01:58Thank you.
02:00Mr. Hendra has joined PNK this time.
02:03It's always exciting to talk to Mr. Hendra.
02:07Usually I like to get new insights.
02:10Especially from friends in the coal industry.
02:13Many parties have said that it is time for coal to be removed and replaced by renewable energy with energy sources that are more environmentally friendly.
02:22From the POV or point of view of friends in the coal industry, what does this look like?
02:27Is it a waste? Or dealing with this with various strategies applied by Mr. Hendra so far?
02:34Okay, thank you for inviting me to the FinCash event.
02:38The event is very interesting.
02:39The topic that was raised for me as a representative of the mining industry is of course interesting.
02:45And also challenging.
02:47Because as long as we talk about the coal community, it must be exciting.
02:51If we google about coal, there are a lot of negatives.
02:56There are more negatives.
02:57Even if we look at it, people almost assume that coal has entered the sunset period.
03:07If you think about it, sunset is the best time, right?
03:11Yes.
03:12Sunset is the time we want the most.
03:14The sun is good.
03:15Sunset, coffee, sunset, the sun is good.
03:17Sunset is perceived that this industry will soon be dark.
03:22But if we look at the last five years, the price of the community is getting stronger.
03:28Even though the trend is declining in recent years.
03:31This indicates that this sunset seems to be prolonged.
03:36Why?
03:37Because the demand for the coal community in the middle of negative sentiment actually increased.
03:44So we talk about data and facts if we give an argument.
03:49Facts show that the production of Indonesian coal in the last 10 years has continued to increase.
03:56The trade of global seaborne thermal coal continues to increase.
04:04Even though the growth is only 2% or 3%, but it increases.
04:08So coal is still needed.
04:10During the crisis, we remember the crisis of the pandemic yesterday.
04:14The price of coal rose to the moon.
04:16Up to $300 per ton, $400.
04:20Before that, at the beginning of the pandemic, it was only below $60.
04:25It's unimaginable, right? It can rise many times.
04:28Then the other crisis, the 2008 financial crisis, the price of coal also rose.
04:33So for Indonesia, the coal community has become the savior, the backbone of our economy.
04:41And also our energy conservation.
04:43Until now, with the electricity we enjoy, 70% of it is from coal.
04:47And we see it as an entrepreneur that this is a blessing,
04:52a blessing from God that we should be able to make the most of for the prosperity of the people.
04:57Yes, but related to the continuous increase in coal demand, the demand is still high.
05:02So, logically, we as ordinary people,
05:07when there are many programs related to reducing the use of coal as a fuel,
05:13it will automatically decrease, right?
05:15But then what you said earlier,
05:19you said that the demand is still very high.
05:22How do you explain all of that, Mr. Hendra?
05:26Yes, of course, if it is said that coal will end, it will end eventually.
05:33Because no matter what, the coal that you mentioned earlier is fossil energy,
05:38non-renewable energy. It will run out eventually.
05:41But when will it run out? This is the question, right?
05:44When will it run out? It can run out in hundreds of years, in thousands of years.
05:48Because the process of the formation of coal is millions of years.
05:51Thousands of years formed from planting, right?
05:56The grass can become coal.
05:58If we ourselves in Indonesia, our coal production, our reserve is 35 billion tons.
06:05Our resource is 100 billion tons.
06:08If we convert our reserve of 100 plus 35 billion tons,
06:13our production is 500 million tons on average.
06:18We still have hundreds of years, actually.
06:21So, as long as coal is still the cheapest energy source commodity,
06:27it should be our strength.
06:31Well, we don't deny that energy transition is important.
06:35We have to care about the climate,
06:38because energy is one of the largest sources of global warming.
06:46Therefore, energy transition is very important, and the companies also adhere to it.
06:51The key, in our opinion, is technology.
06:56Because the coal that has been an issue all this time
07:00is the coal produced from burning in the PLTU.
07:04Maybe people see, oh, this is a smoke hole, the PLTU coal.
07:07The smoke is black, dense.
07:09Even during the Jakarta issue, the highest pollution.
07:15It's very crowded.
07:16This is coal, the PLTU coal around Jakarta.
07:20100 kilometers outside Jakarta is considered this.
07:23So, the issue is technology.
07:25If the mining itself, the emission is not too big.
07:28So, if the coal is still wanted to be used,
07:32because, again, this is a blessing.
07:35Don't forget that developed countries,
07:37America can move forward.
07:39Europe is thanks to coal.
07:41So, their industrialization started with coal.
07:45For hundreds of years.
07:47Only after they advanced, they gradually left coal.
07:50But America still produces coal, almost 700 million tons.
07:54Okay, so the point is that technology is the key.
07:58Technology to capture or absorb,
08:02capture the emissions from the PLTU coal.
08:06If it can be found and it can be economical,
08:09the issue of coal pollution should not be significant anymore.
08:15So, with the Renewable Energy narrative,
08:18it was reduced to programs that
08:22started to eliminate the use of fossil fuels.
08:25This does not make you worried in the coal industry, right?
08:29This is an industry, a business.
08:31We are talking about business. As long as there is a demand.
08:35Because there are still many.
08:37We remember a while ago,
08:39there was a kind of electricity crisis in Europe.
08:43Because they then decided to reduce the use of fossil fuels.
08:50But it turned out that it was not enough
08:54so there was a decrease in electricity supply and so on.
08:59It is quite illustrative.
09:01It turns out that the need for coal is still very high.
09:05And finally, they went back to the power plant
09:09that uses fossil fuels.
09:12Yes, as an illustration, that's more or less.
09:14That's right. That's a lesson for us.
09:16That we really need to prepare.
09:20Don't be too hasty to leave coal.
09:24Of course, coal will be replaced.
09:26As I said earlier.
09:27But of course, renewable energy sources
09:30that are cleaner must also be ready.
09:32Coal remains the backbone.
09:34Because no matter what, it has been proven
09:37that coal is the most stable electricity.
09:39We have a lot of renewables.
09:41There is wind, there is solar power.
09:44But it's not stable.
09:47The wind we have is also not stable.
09:52Unlike the North Atlantic, for example.
09:57The wind is quite stable.
10:01And solar PV, if we rely on the sun,
10:04sometimes it rains too.
10:06But coal is the most stable.
10:08And it has been proven for hundreds of years.
10:10Okay. This is also a lot of consideration
10:15from various countries to finally shut down.
10:19Because the demand is still very high.
10:23Okay. You mentioned about the technology.
10:26This is what causes pollution
10:32when the use of coal itself
10:34causes quite a high emission.
10:37How far is it related to the technology,
10:40the use itself from IMA friends,
10:43to advance it so that then
10:45the emission can be very suppressed.
10:48And this is also a proactive effort
10:51from coal industry friends
10:53to reduce the emission level
10:55and minimize the pollution
10:57that can be produced from the production process
11:00to the use.
11:02Okay. Now if we talk about the climate,
11:04the most important thing is
11:06how we reduce emissions.
11:08And it's not just the responsibility
11:10of the energy industry
11:12or agriculture.
11:14Everyone also produces emissions.
11:17The private sector also produces carbon emissions.
11:20The most is of course in transportation,
11:23on the road.
11:24But now the context is energy.
11:26Okay. So reducing emissions.
11:28This is the key word.
11:29How do we reduce the carbon footprint?
11:32First, if we are from an association
11:35that represents mining.
11:37Mining is what produces minerals or coal.
11:40Then the coal is burned
11:42by the electricity market.
11:44The electricity market is another industry.
11:47PLN in this case.
11:49PLN and also Independent Power Producer or IPP.
11:53That's where I said earlier
11:55that reducing emissions through carbon capture
11:57is on the side of the producer.
11:59So as long as there is technology
12:01that is economically viable
12:05that can capture carbon,
12:08coal should not be an issue anymore.
12:10It means that coal producers
12:12have completed their tasks when selling coal.
12:15The users can do whatever treatment they want.
12:18This is a good question.
12:19Maybe I haven't explained the treatment yet.
12:22But it's interesting.
12:23You raised it.
12:24So back again,
12:25on the side of the healer,
12:27it's on the rise.
12:29It needs technology
12:30that is still very expensive today.
12:33Carbon capture.
12:34On the mining side,
12:37the effort to reduce emissions is also very important.
12:40The emissions produced are not as big
12:42as the electricity market.
12:44PLTU Cerobong.
12:45We capture coal.
12:47By capturing coal,
12:48we reduce emissions in many ways.
12:51By advertising.
12:53We also use,
12:55the land that is opened is advertised.
12:57And that's a must.
12:59We also use biofuel now.
13:02So solar has been mixed with oil.
13:05Now it's B40.
13:06It means it's significant.
13:0870% of our solar has been mixed.
13:10It means we reduce emissions quite a lot.
13:12From the old side.
13:13From the old side.
13:14And many other efforts have been made.
13:17Now coal,
13:19of course,
13:20must apply ESG properly.
13:24Now how the coal
13:26that will be absorbed by the industry
13:28reduces emissions.
13:30If we look at it,
13:3270% of our domestic coal
13:34is burned by PLN.
13:36Electricity.
13:3730% is by the non-PLN industry.
13:40So there's cement.
13:42There's paper factory.
13:44There's factory.
13:45Almost all factories.
13:46There,
13:47the emissions produced by the factories
13:49the technology to capture the carbon
13:52is not yet available.
13:54This is the problem.
13:55Okay.
13:56That this then becomes
13:59a kind of responsibility on the side.
14:02But what gets the impact
14:04is the friends in the old side.
14:06Does it mean there's communication
14:08between the old and the new side?
14:10So then,
14:11from the old side,
14:13various practices have been done
14:15to reduce emissions.
14:16But maybe in the new side,
14:17can it be helped?
14:19Because in terms of image,
14:20the coal itself
14:22also gets affected.
14:24I mean,
14:25admittedly, this happens.
14:27Yes, because the image now is commodity.
14:29Yes, that's right.
14:31The user,
14:32of course, from the user's side,
14:34this is economic, right?
14:36As long as it's economic,
14:38of course,
14:40coal is used.
14:41Because maybe the technology is expensive,
14:42why do they provide the technology
14:44for carbon capture?
14:46That's the problem.
14:47But from the recommendation,
14:48there's no producer friends
14:49so that later the treatment
14:51is done with technology
14:54that is more environmentally friendly.
14:56Well, if we look back
14:57from the perspective of Pembangkit,
14:58which is actually another industry,
15:00but if we look at Pembangkit,
15:03the technology of Pembangkit,
15:05Pembangkit machines that reduce emissions
15:07have also begun to develop.
15:08We see there are several PLTUs
15:10in Cirebon Power, for example,
15:12which use ultra supercritical.
15:16That's the highest technology
15:17with low emissions.
15:19It's just limited to a few PLTUs.
15:22Other PLTUs,
15:23of course, back again,
15:24this is expensive.
15:25So most of our PLTUs
15:27are still old technology
15:29with still inefficient emissions.
15:32So, if the technology is available
15:34in all PLTUs,
15:35but of course it's expensive,
15:36the emissions produced by the PLTU
15:38will also decrease.
15:39Especially if there is carbon capture
15:41that can capture.
15:43In an accumulative way, Mr. Hendra,
15:44maybe it can be conveyed
15:45when then from Hulu and also Hilir
15:47practice the process
15:49or processing that is more environmentally friendly,
15:52how much carbon
15:54or emissions can be suppressed?
15:55As a percentage.
15:57Okay, maybe we look at the approach
15:59from the tax side first.
16:02If we quote
16:04a statement from the Minister of Finance,
16:06Mrs. Sri Mulyani,
16:07a few times ago,
16:08said that for Indonesia
16:10to reach net zero emissions,
16:13reducing emissions in 2030 alone,
16:15it requires more than 200 billion dollars.
16:19200 billion dollars, how many trillions?
16:22I can't count it anymore.
16:23It's zero.
16:24250 billion dollars.
16:28This is the issue.
16:30Meanwhile, our APBN funds are limited.
16:33How to deal with it?
16:34This is the problem in technology.
16:37As for the emissions I mentioned earlier,
16:39the reduction of emissions
16:41done by mining is quite enough.
16:43There is advertising,
16:44there is biofuel, etc.
16:46From the efforts that have been done in Hulu,
16:48how many percent has the emissions been suppressed?
16:51I don't know exactly.
16:53But it's quite significant.
16:55It should be the most factual
16:59from the biodiesel side.
17:01Solar has a huge impact.
17:03Indonesia's largest solar industry user is mining.
17:07And we are now using B40.
17:10So 40% of the solar energy
17:12is mixed with biodiesel.
17:14That should be significant.
17:16How big the impact is,
17:18I don't think it's up to us.
17:19Clearly, we from mining
17:21keep trying to ensure
17:23that mining activities are done
17:25to reduce the carbon footprint.
17:27Okay.
17:28Maybe there are steps
17:30that are mandated by the government
17:32or maybe policy makers
17:34to help reduce emissions
17:37from the use of coal itself.
17:39So that the image of coal
17:42will also be more...
17:47more...
17:48changed compared to the image
17:50that exists now, Mr. Hendra.
17:52With this energy transition
17:55that keeps going on, Mr. Hendra,
17:57what is the discussion
17:59about the use of coal in the future?
18:01With various stakeholders,
18:03whether it's the government
18:05or maybe with users and so on.
18:08Okay.
18:09Let's go back.
18:10Coal is...
18:12God's gift.
18:14Which is the backbone of our economy.
18:18And also energy conservation.
18:20Energy.
18:21Those two things are important.
18:23Because the government or the world
18:25is now one of the keys
18:27to energy conservation.
18:28So, as long as coal is still
18:31a source of energy conservation and economy,
18:33of course we need the support
18:35from the government.
18:37Because this is our wealth.
18:40Other countries have to collect coal.
18:43While we are the largest exporter in the world.
18:46So, this is definitely
18:48a concern.
18:49But it's true that
18:51the priority of us,
18:53as miners,
18:55is to make sure that
18:57coal mining is done
18:59by applying the principles
19:01of good mining practices.
19:03This is what makes
19:05many portraits of coal mining
19:07more negative.
19:09Holes left by mining,
19:11wild mining, and so on.
19:13This is what needs to be minimized
19:17from the point of view of
19:19compliance with regulations.
19:21That's the key.
19:22If we, as miners,
19:24as long as the demand is still high,
19:28why not?
19:30And if we look at it,
19:32our exports are 99%
19:34to Asia-Pacific countries.
19:36Countries that we see
19:38still rely on coal.
19:41Look at China.
19:43China is the second superpower country
19:45to import the largest coal in the world.
19:48Japan, a well-known clean country,
19:52still relies on coal.
19:55So, the demand for coal is still high.
19:58We have a lot of coal.
20:00To measure various efforts
20:02from mining friends,
20:03that so far they have done
20:05mining that is sustainable,
20:07environmental friendly practices,
20:09more or less.
20:10Is there a certification or not?
20:13And is the certification done after mining?
20:16Because, for example,
20:17with the efforts that have been done,
20:19using B40, if I'm not mistaken,
20:21then re-planting
20:23for areas that have been mined.
20:26That is indeed an indicator of
20:28certification practices
20:30that are environmentally friendly.
20:33Is the certification then done
20:35after mining?
20:37Or what is it like, Mr. Hendra?
20:39Yes, it's interesting.
20:40I think this is the role of the government
20:41as a supervisor.
20:42And the obligations that are done,
20:45this is the government that ensures that
20:47From the association,
20:48they strongly recommend this, right?
20:49Oh yes, of course.
20:50To mining friends.
20:51Yes, of course.
20:52And if we look at the IMA members,
20:55we are even proud
20:57that our members comply
20:59with the rules.
21:01Even if we look at,
21:02what was mentioned earlier,
21:03the evaluation indicator.
21:05In Indonesia,
21:06by the Ministry of Environment and Forestry,
21:09since 20 years ago,
21:11they have implemented
21:13the annual program of
21:14increasing the environment
21:16or known as PROPER.
21:18And it is implemented voluntarily,
21:20which is followed by thousands of companies
21:22from all industries in Indonesia.
21:24Which is rated every year.
21:25The worst is black,
21:27it can be taxed,
21:28there is red, blue, green,
21:30and the best is gold.
21:32And maybe many people
21:34haven't heard the positive news.
21:37Because usually,
21:38the good news is the bad news.
21:40And if we look at Indonesia,
21:42for the last 10 years,
21:44since 2012,
21:46there are 5 or 4 mining companies
21:49that get the highest rating
21:51in terms of environmental protection.
21:53Of course, many people are confused.
21:54How can a mining company do that?
21:56And this is proof.
21:58So we can state that
22:00mining companies,
22:02there are also many
22:04who really care about the environment.
22:06Under the association,
22:08how many compliance ideals
22:10so far?
22:12If our members,
22:14it can be said all, 100%.
22:16Mining companies.
22:17And this is a good example.
22:19There are a lot of awards
22:20made by the government
22:21or outside agencies.
22:22Not only mining of coal,
22:24but also mining companies
22:26that are also known
22:28as companies that really comply
22:30with environmental regulations.
22:32Energy transition is not only done
22:34by various sectors
22:36that use coal.
22:38Coal producers themselves
22:40also make various efforts
22:42to direct energy transition.
22:44In this phase,
22:48what is the most challenging
22:50from the point of view of coal producers,
22:52Mr. Hendra?
22:54The most challenging, of course,
22:56is perception.
22:58Because what was said earlier,
23:00almost all have a negative perception.
23:02For this industry to develop,
23:04it must have a positive perception.
23:06Negative perception
23:08causes
23:10access funding
23:12to funding to become more difficult.
23:14Now, to develop
23:16a coal-based business,
23:18we are also required to
23:20gasify coal,
23:22convert coal into gas,
23:24and so on.
23:26We need small investments.
23:28For financing,
23:30it can be said that
23:32it is almost closed.
23:34How can we,
23:36companies, invest
23:38if there is no funding?
23:40Even though we are the backbone.
23:42I think this is an interesting topic.
23:44How do you,
23:46the coal industry,
23:48continue the operation
23:50when a lot of funding
23:52is closed for this sector?
23:54Then, what is being done
23:56so far?
23:58Why is it limited?
24:00Especially after the renovation of Renewable Energy,
24:02the transition of EBT,
24:04and so on.
24:06An interesting question.
24:08On one hand,
24:10funding is limited.
24:12But on the other hand,
24:14production continues to increase.
24:16So, there is still a lot of funding.
24:18Exactly. But the issue is
24:20how companies can invest
24:22in cleaner energy.
24:24We are required to transform
24:26and diversify to
24:28Renewable Energy.
24:30For example, the coal companies
24:32are now investing in cleaner energy.
24:34It requires funds that are not small.
24:36The access is more difficult.
24:38Okay.
24:40It is clear that there are
24:42investments that can be used
24:44to close
24:46the operation of coal companies.
24:48Okay. In short,
24:50in the future, in terms of production
24:52and also
24:54market,
24:56how do you project both?
24:58In the middle,
25:00EBT or Renewable Energy
25:02that is still
25:04prioritized by many countries
25:06and governments.
25:08Okay. In 2024, our production target
25:10may be
25:12realized below the target.
25:14But the price is still
25:16in a positive level.
25:18Although it is lower than
25:202022, 2023, and 2022.
25:22The demand
25:24in the next few years
25:26is still strong.
25:28We are still optimistic. In the next few years,
25:30the price is still at a strong level.
25:32The biggest issue is
25:34in the long term.
25:36In the long term, we are investing
25:38to transform.
25:40So, access to funding
25:42and support for consistent regulation
25:44and policy is very much needed
25:46by entrepreneurs.
25:48Okay. Interesting. With Mr. Hendra here,
25:50we can learn more
25:52from your point of view.
25:54In the middle, there are many things
25:56that we have heard
25:58from the government
26:00such as renewable energy transition.
26:02Thank you, Mr. Hendra,
26:04for joining Vincas.
26:06Don't be shy, Mr. Hendra.
26:08We will invite you
26:10to Vincas to talk
26:12about many things such as
26:14sustainable industry. Good luck, Mr. Hendra.
26:16For you,
26:18as an investor, don't forget to
26:20keep watching Vincas.
26:22In each episode, we will have interesting discussions
26:24with interesting sources.
26:26I am Wiki Adrian.
26:28Thank you. See you.
26:48Transcription by ESO. Translation by —