East Kalimantan Environmentally Sustainable Development Strategy

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Real-time and publicly available MRV systems are needed to help communities fight
fires. While the zero burningpolicies will help with fire prevention, inevitably some man-made fires
will continue, and the community fire brigades will need to focus on extinguishing them. While
watchtowers are an effective local means of monitoring, satellite detectors can identify remote fires
or larger fires that will require support from the district and province to help suppress. There are
already existing tools, such as the online IndoFire service, which are publicly available and can be
used to support this monitoring.
COAL SECTOR
Coal mining has long been a source of tension in development plans. Coal’s value attracts
substantial investment to East Kalimantan, and it provides significant tax revenues and contributes
to GDP. Yet, coal mining provides few jobs compared to labor-intensive manufacturing or
agriculture. If done poorly, mining can leave huge environmental consequences. Still, coal is a
central part of East Kalimantan’s economy and will remain so for decades. This strategy aims to
improve its efficiency and seek measures to minimize its destructive impacts.
Current Context
East Kalimantan has several mineral resources, but coal mining dominates production.
While there remain an estimated 50 million tons of gold and silver, there has been very limited
gold and silver production since the closure of the PT KEM mine in 2004. East Kalimantan has
substantial coal reserves, estimated to be 3.6 billion tons, equal to 19 percent of Indonesia’s total.
Thus, virtually all mining today is for coal. The majority of East Kalimantan’s coal is low in sulfur and
ranges from low- to high-calorie (43 percent of reserves are within 6,100–7,100 CV range), which
means East Kalimantan coal can be exported to both steel mills (which require high-calorie coal) as
well as power plants.
Coal mining is a significant driver of East Kalimantan’s economy. From 2000 to 2008, coal
production grew rapidly by 15 percent p.a., raising its contribution to total GDP from 8 percent to 20
percent. Production has already reached 119 million tons and some infrastructure, such as ports,
are reaching their limits. Going forward, growth in coal production is expected to slow to 5 percent,
as infrastructure constraints and concession limits are reached, in line with Indonesia’s average.
(Box 4 discusses concession types.) At this rate, by 2030, the coal mining sector will account for a
significant 31 percent share of the provincial real GDP.
DRAFT
Coal mining in East Kalimantan contributes significant emissions, mainly through its
associated deforestation, which are estimated to be 27 MtCO2e in 2010. These emissions
are equivalent to 11 percent of East Kalimantan’s total emissions. Most emissions from coal
mining are due to deforestation to open up areas for mining exploration and production, not the
mining processes themselves. As each hectare of deforested land emits over 800 tons of CO2e,
the deforestation due to mine opening accounts for 68 percent of the emissions from the coal
sector, while the mining process itself (such as digging, crushing, and transport) contributed only
21 percent of total emissions. The remaining 11 percent of emissions comes from methane that is
released from the coal seam as it is mined. As the coal sector is growing, emissions will likely grow
by 2 percent p.a. and reach 41 MtCO2e by 2030, equivalent to 12 percent of the province’s total
emissions.
Deforestation is high as most miners use open pit mining, which strips the surface of the
concession. Underground mining could avoid much of this deforestation, but it is unfeasible in
East Kalimantan. Virtually all coal reserves in East Kalimantan are shallow, making underground
mining technically unfeasible. Furthermore, mining in East Kalimantan is dominated by small
companies, which lack the sophisticated equipment, knowledge, and funding to implement
underground mining, which has much greater safety risks. Of 301 coal mining companies in East
Kalimantan, only 2 have employed underground mining, i.e., Kitadin and Fajar Bumi Sakti.