East Kalimantan Environmentally Sustainable Development Strategy

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exploration and production concessions located within protected areas are illegal. 18 An effective
abatement strategy would require that East Kalimantan surveys all forested lands and checks the
licenses of all mining companies within the forested lands The estimated cost to implement this
initiative, in present value and excluding the opportunity cost from illegal mining, is around USD
0.01 to 0.02 per tCO2e p.a. by 2030. Box 6 discusses mining infrastructure and deforestation.
Mining Infrastructure and Deforestation
If not managed well mining infrastructure could lead to further deforestation. In order to access
the coal deposits in the middle of forests, many big miners in East Kalimantan build roads across
the forest areas. However, the availability of roads allows settlers to encroach on the forest. It is not
uncommon that the settlers also clear trees and build permanent structures along the roadsides.
Small miners, unlike the big ones, are generally unable to afford their own infrastructure. Therefore,
they leverage the existing public roads, HPH roads, or rivers. The use of existing HPH roads can
actually prevent further deforestation, as the roads are typically managed by the HPH companies
that have strong interests to control their logging area and prevent encroachment from the settlers.
Going forward, big miners need to leverage the HPH roads or alternatively build railways instead of
roads to minimize settlements along roadsides.
To accommodate the coal mining workers, many big miners also build small encampments near
the site in the midst of the forest. While the mine is operating, the encampments grow bigger as
many local traders come to establish their businesses. Some even bring their families and build
houses around the encampments. When these mining encampments have grown large enough,
they can apply to be formal villages (desa) or even sub-districts (kecamatan). If approved, then the
encampments will become permanent villages and will be entitled to some development funding.
The growing sub-districts then increase their pressure on the forest areas. Going forward, East
Kalimantan needs to encourage the big miners to prevent the unplanned growth of encampments.
Minimizing methane release could capture 4.77 MtCO2e of abatement. Reducing the
release of methane into the atmosphere is the second largest abatement lever after deforestation.
Methane is 20 times more potent than CO2 as a greenhouse gas, and coal seams in East
Kalimantan have high concentrations of methane, 1.46 m3 per ton of coal (around 88 percent of
total gas concentration in coal). As coal mining in East Kalimantan is dominated by open pit mining,
methane is released from seams when miners remove the earth above the deposit (overburden).
Additional methane trapped in rock pores is released during the crushing and milling process. Yet,
no measures to mitigate the release of methane are currently in place in East Kalimantan. Existing
mining legislation is not explicit enough in prohibiting methane releases. Moreover, the commercial
utilization of methane gas is hindered by the current regulations for coal-bed methane, which
requires coal miners to follow a lengthy process if they want to flare 19 or use the methane.
DRAFT
We have identified a number of recommended steps to help reduce methane release: petition
the Ministry of Energy and Mineral Resources to simplify the requirements for CBM; pass new
regulations requiring methane capture in mining operations; provide technical support to miners
that apply for Clean Development Mechanism funding; and launch a new mining monitoring
Box 6
18 Not all mining operations located within protected zones are illegal. Within the protected zones, there are
many different forest types. To simplify from the mining point of view, there are two main categories: 1)
Conservation forests (e.g., Cagar Alam, Suaka Margasatwa) – strictly no mining unless the mining right or
contract had been issued prior to the new forestry law, UU No 41 Year 1999; 2) Protection forests (e.g.,
Hutan Lindung) – surface mining is prohibited, underground mining is allowed with prior approval from the
Minister of Forestry, unless the mining right or contract had been issued prior to the new forestry law, UU
No 41 Year 1999.
19 Flaring converts the methane to CO2, and therefore it is more environmentally friendly than having methane,
which is a 20 times more potent greenhouse gas than CO2, be released to the atmosphere directly.