Indonesian Coal - is it a Sunset Economy?
Jan 13th 2013, 2:58 am
#16
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Re: Indonesian Coal - is it a Sunset Economy?
The reason behind the cost effectiveness and success of the Kalimantan coal basins relates to simple factors.
Easy open cut mining alongside the extensive river networks that traverse the tropical rain forests and swamps allow the coal to be shipped by barge to one of 23 coal loading terminals, many of them floating.
Eight of those terminals are in South Kalimantan, and 15 are in East Kalimantan. There are a further 29 smaller transition or temporary coal loading facilities operational in Kalimantan.
By comparison there are only 5 terminals in Java and 8 in Sumatra.
The Indonesian rivers provide free and prebuilt transport networks out to the open ocean. Transport to a port, and shipping costs to port of destination are proving to be the real cost determinants of coal mining. The tonnage and volumes are high, and road transport is prohibitively expensive. Only rail and ship/barge transportation can prove cost effective.
In Australia where the coal is transported via rail the transport costs account for around 25% of the cost of a tonne of coal, compared to labour costs of 22% and operational costs of 21%.
At $80/tonne this would mean around $20 per tonne just for transport to the port.
Rail is also expensive and difficult to establish, involving engineering feats such as bridges, cuttings and tunnels, and is subject to complexities of government and labour control. It is more a factor of the establishment and investment in the rail network than the actually running costs that provide the real advantages.
Easy open cut mining alongside the extensive river networks that traverse the tropical rain forests and swamps allow the coal to be shipped by barge to one of 23 coal loading terminals, many of them floating.
Eight of those terminals are in South Kalimantan, and 15 are in East Kalimantan. There are a further 29 smaller transition or temporary coal loading facilities operational in Kalimantan.
By comparison there are only 5 terminals in Java and 8 in Sumatra.
The Indonesian rivers provide free and prebuilt transport networks out to the open ocean. Transport to a port, and shipping costs to port of destination are proving to be the real cost determinants of coal mining. The tonnage and volumes are high, and road transport is prohibitively expensive. Only rail and ship/barge transportation can prove cost effective.
In Australia where the coal is transported via rail the transport costs account for around 25% of the cost of a tonne of coal, compared to labour costs of 22% and operational costs of 21%.
At $80/tonne this would mean around $20 per tonne just for transport to the port.
Rail is also expensive and difficult to establish, involving engineering feats such as bridges, cuttings and tunnels, and is subject to complexities of government and labour control. It is more a factor of the establishment and investment in the rail network than the actually running costs that provide the real advantages.
Jan 13th 2013, 3:08 am
#17
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Re: Indonesian Coal - is it a Sunset Economy?
The reason behind the cost effectiveness and success of the Kalimantan coal basins relates to simple factors.
Easy open cut mining alongside the extensive river networks that traverse the tropical rain forests and swamps allow the coal to be shipped by barge to one of 23 coal loading terminals, many of them floating.
Eight of those terminals are in South Kalimantan, and 15 are in East Kalimantan. There are a further 29 smaller transition or temporary coal loading facilities operational in Kalimantan.
By comparison there are only 5 terminals in Java and 8 in Sumatra.
The Indonesian rivers provide free and prebuilt transport networks out to the open ocean. Transport to a port, and shipping costs to port of destination are proving to be the real cost determinants of coal mining. The tonnage and volumes are high, and road transport is prohibitively expensive. Only rail and ship/barge transportation can prove cost effective.
In Australia where the coal is transported via rail the transport costs account for around 25% of the cost of a tonne of coal, compared to labour costs of 22% and operational costs of 21%.
At $80/tonne this would mean around $20 per tonne just for transport to the port.
Rail is also expensive and difficult to establish, involving engineering feats such as bridges, cuttings and tunnels, and is subject to complexities of government and labour control. It is more a factor of the establishment and investment in the rail network than the actually running costs that provide the real advantages.
Easy open cut mining alongside the extensive river networks that traverse the tropical rain forests and swamps allow the coal to be shipped by barge to one of 23 coal loading terminals, many of them floating.
Eight of those terminals are in South Kalimantan, and 15 are in East Kalimantan. There are a further 29 smaller transition or temporary coal loading facilities operational in Kalimantan.
By comparison there are only 5 terminals in Java and 8 in Sumatra.
The Indonesian rivers provide free and prebuilt transport networks out to the open ocean. Transport to a port, and shipping costs to port of destination are proving to be the real cost determinants of coal mining. The tonnage and volumes are high, and road transport is prohibitively expensive. Only rail and ship/barge transportation can prove cost effective.
In Australia where the coal is transported via rail the transport costs account for around 25% of the cost of a tonne of coal, compared to labour costs of 22% and operational costs of 21%.
At $80/tonne this would mean around $20 per tonne just for transport to the port.
Rail is also expensive and difficult to establish, involving engineering feats such as bridges, cuttings and tunnels, and is subject to complexities of government and labour control. It is more a factor of the establishment and investment in the rail network than the actually running costs that provide the real advantages.
I genuinely know-nothing of the human costs involved in mining in The Far East/ Asia...
Does that come into the equation?
Jan 13th 2013, 4:56 am
#18
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Re: Indonesian Coal - is it a Sunset Economy?
I came from Derbyshire where there was a coal mining industry. In 1973 Markham Colliery employed 1,870 men below ground and 425 on the surface to produced about 30,000 tons per week of saleable coal.
Thats about 13 tons a WEEK per man.
The same year according to this paper
http://library.isgs.uiuc.edu/Pubs/pd...rals/im060.pdf
Illinois mines were producing between 12 and 76 tons per DAY per man.
(you can see why they closed the UK coal mines down...)
By the late 1980s when I worked as an Engineer in Australia I was staggered how few people the mines employed, especially in open cut operations.
Thirty eight workers were producing 5,000 tonnes of coal per shift. Two shifts a day, 312 days a year.
Thats 131 Tonnes per man per shift.
So labour costs arent really a big issue. Transport is the key, get low cost transport in modern mining and you are on a winner.
The full costings for a coal mine are:
Last updated - November 2007
Production
Mine Type: Surface Mine
Stripping Ratio: 1:1
Ore Production: 5,000 tonnes per day
Waste Production: 5,000 tonnes per day
Haul Distance - Ore meters 1,068
Haul Distance - Waste meters 535
Total Resource tonnes 18,715,000
Hours per shift 10
Shifts per day 2
Days per year 312
Bench height - Ore meters 5.49
Bench height - Waste meters 8.53
Powder factor - Ore kg/tonne 0.28
Powder factor - Waste kg/tonne 0.23
Development
Preproduction Stripping tonnes 150,000
Haul Road Construction meters 1,603
Equipment
Hydraulic Shovels 1-4.5 cu.mt
Front-end Loaders 1-5.4 cu.mt
Rear-dump Trucks 5-36.3 tonne
Rotary Drills 1-17.15 cm
Bulldozers 4-125 kW
Graders 1-150 kW
Water Tankers 1-9,500 liter
Service/Tire Trucks 3-6,800 kg gvw
Bulk Trucks 1-450 kg/min
Light Plants 4-13 kW
Pumps 2-4 kW
Pickup Trucks 4
Buildings
Shop sq.meters 486
Dry sq.meters 221
Office sq.meters 383
Warehouse sq.meters 297
Anfo Storage Bin cu.meters 20
Hourly Personnel Requirements
Drillers 2
Blasters 2
Excavator Operators 4
Truck Drivers 7
Equipment Operators 9
Utility Operators 2
Mechanics 4
Laborers/Maintenance 8
----
Total Hourly Personnel 38
Salaried Personnel Requirements
Manager 1
Superintendent 0
Foreman 2
Engineer 1
Geologist 1
Supervisor 2
Technician 4
Accountant 0
Clerk 1
Personnel 0
Secretary 2
Security 1
------
Total Salaried Personnel 15
Primary Supply Requirements
Diesel Fuel liter/day 5,262
Electricity kWh/day 639
Powder kg/day 2,550
Caps #/day 22
Primers #/day 20
Drill Bits #/day 0.07
Det. Cord m/day 287
Cost Summary
Operating Costs
Supplies & Materials $/tonne ore $2.07
Labor $/tonne ore 1.96
Administration $/tonne ore 0.82
Sundry Items $/tonne ore 0.48
------
Total Operating Costs $5.33
Capital Costs
Equipment $8,066,100
Haul Roads 1,095,600
Pre-production Stripping 393,500
Buildings 1,632,700
Electrical System 63,600
Working Capital 1,258,200
Engineering & Management 2,025,300
Contingency 1,453,500
-----------
Total Capital Costs $15,988,500
Total per Daily Tonne Ore & Waste $1,599
Jan 13th 2013, 5:29 am
#19
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Location: Sydney
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Re: Indonesian Coal - is it a Sunset Economy?
Another part in the "useless but interesting" trivia of the coal industry:
A large part of the Uk coal industry was established and geared to supply high grade coal to the Royal Navy and the railway trains, where calorific value per ton meant lower storage, refuelling and weight costs and troubles. The best was South Wales Anthracite... Hard to mine, deep underground and in thin seams, hundreds of miners died trying to extract it.
The move to oil for shipping and diesel trains buggered up the industry, who didn't really understand that you can put any old crap coal onto a house fire or into a power station. The mines hung on, but in the end it was inevitable.
The same thing happened in Indonesia before the current boom. The coal mining operations were small scale, peaking at about 2 million tonnes in 1941, and mainly supplied the shipping industry. As ships moved to oil fired engines the industry declined to almost nothing, producing just 200,000 tonnes of coal by 1972.
The new indonesian mines really are crap coal (although not as bad as some Australian mines...), but they are fine for coal fired thermal power stations.
A large part of the Uk coal industry was established and geared to supply high grade coal to the Royal Navy and the railway trains, where calorific value per ton meant lower storage, refuelling and weight costs and troubles. The best was South Wales Anthracite... Hard to mine, deep underground and in thin seams, hundreds of miners died trying to extract it.
The move to oil for shipping and diesel trains buggered up the industry, who didn't really understand that you can put any old crap coal onto a house fire or into a power station. The mines hung on, but in the end it was inevitable.
The same thing happened in Indonesia before the current boom. The coal mining operations were small scale, peaking at about 2 million tonnes in 1941, and mainly supplied the shipping industry. As ships moved to oil fired engines the industry declined to almost nothing, producing just 200,000 tonnes of coal by 1972.
The new indonesian mines really are crap coal (although not as bad as some Australian mines...), but they are fine for coal fired thermal power stations.
Last edited by slapphead_otool; Jan 13th 2013 at 5:38 am.
Jan 13th 2013, 5:50 am
#20
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Re: Indonesian Coal - is it a Sunset Economy?
I just discovered that the other reason why the Admiralty (Royal Navy) used Welsh coal, a semi anthracite coal, and Swansea coal, an almost pure antharcite coal, was to minimise black smoke which gave away locations.
Merchantmen on the other hand used Biruminious, semi Bitumous and semi anthracite coals and smoked their way around the world.
Strange how a tactical requirement in battle let to an entire industry and to riots in the 1980s.
Merchantmen on the other hand used Biruminious, semi Bitumous and semi anthracite coals and smoked their way around the world.
Strange how a tactical requirement in battle let to an entire industry and to riots in the 1980s.
