Volume 36

Recently I have published a few articles in Coal Asia and I also took part in the conference as the key speaker. In Coal Asia magazine I had an article about Mining Fair in Katowice, Poland and promotional article about Poland mining industry.

2nd Unlocking Sumatra Coal Potential Conference 

in August 2013

Below you will find photos and short summary from friend Mr. Ian Wollff. Later there are those two articles as well.

Close up

I had 30 minutes speech and 25 slides presentation.

Recognition of Appreciation

The International Fair of Mining, Power Industry and Metallurgy "Katowice 2013"

in September 2013

POLAND, East Europe: THE INTERNATIONAL FAIR OF MINING, POWER INDUSTRY AND METALLURGY “KATOWICE 2013″ took place between 10 and 13 of September, 2013 in Katowice city. It is held every two years and it is one of the biggest mining events in Europe. The fair has a 30 years old tradition and attracts over 450 exhibitors. The event is accompanied by conferences in both Polish and English language therefore it magnetizes representatives of European Commission, international agencies, energy organizations, world mining associations, representatives of Polish government, neighboring countries and many journalists, scientist, engineers and consultants. This year fair was officially attended by 20 countries; however the real number of foreign visitors was few times more. Among countries participating in the fair were representatives from UK, Chile, Germany, Vietnam, Russia, Czech, Australia, Iran and Indonesia. One of my guest during the fair was Ambassador of Indonesia in Warsaw Dr. Darmansjah Djumala who vitally promoted the Polish-Indonesian relations. It is also worth to mentioned that that the President of Indonesia has made a state visit to Poland a week before and held an Economic Forum in Warsaw of 4^th of September focusing on strengthening the bilateral trade and organizational efforts in those two countries investment.

The fair attracts usually more than 30 thousands of visitors but next year is going to quite special as the organizer PTG plans to double its size on the available grounds – construction of the new facilities nearby could be observed – as there is more applicants than feasible space (100% occupancy rate). The fair is located in “Spodek” a multipurpose round arena complex. Its Polish name refers to a flying saucer as its impressive shape resembles a large UFO object. Katowice is a capital for the mining activities and a leading industrial city in Poland surrounded with over 5 millions inhabitants within 15 km radius and easy access to its airport. Majority of the Polish mining companies and machinery producers have their headquarters located there. As the representative from an Indonesian company I spent all my four days busy running only the big ones as it was not possible to visit all I wanted due to limited time but also because the Polish famous hospitality - they kept me talking about Indonesian market.

Few of the Polish companies have already established their office in Indonesia and another few are on the way. Definitely there is a potential for cooperation between countries, especially when Poland has enormous experience in both underground and open-pit mining, minerals beneficiations (cupper, coal), heavy duty machinery development and all types of services including mine designing. One of the biggest European open pits Bełchatów coal mine is also located in Poland with the annual coal production at around 50 million tones.
Of course Poland is far away and Indonesia is exposed to all international brands, but do not be mislead, in many occasions OEM producers are based there - as not much of the coal mining activity was left in West Europe. Polish machinery industry and design bureaus offers its equipment and solutions at quality recognized around the world, yet at very competitive price.

The significance of this fair can be simply explained on cultural basis. It is one and big held biennially as opposed many small ones organized in Indonesia. Technological break troughs and innovations in mining take a while to develop and test. Reputable companies devoted to their product ensure their expertise on fields in homeland. By expressing this
I would like to invite you to Poland to see what is possible; thus is to have a visit in underground mine, at open pit operation or observe advanced infrastructure solutions like conveyor systems. I hope to see you there in 2015.

For Coal Asia, Robert Machnik from PT Gistec Prima.

The strength of Polish mining industry comes from experience, advance technology and hundreds years of tradition

Poland is the 6^th largest economy in European Union (EU) by both population and GDP. More over the country is considered to be a green zone while others members of EU during recession encounter more or less troubles. This 38 million population  nation has a significant mining industry that is ranked as no. 9 for the total global output with approximate 145 million tons per annum (2,4% of worldwide share) and ranked no. 10 for estimated proven coal reserves – almost 8000 million tons (1,6% of global share). The production of the anthracite & bituminous coal at the level of 80 million ton comes from underground mines, while sub-bituminous & lignite coal at the level of 65 million tons comes mostly from open-pit operations.  A unique mine is a Bełchatów Coal Mine with a 50 million ton of lignite output per year. As it is one of the largest surface operations in Europe and is located nearby the largest coal fuelled thermal power plant in Europe. The Bełchatów Power Station - 5,053 MW capacities produces 28 TWh of electricity per year, or 20% of the total power generation of the country. In short Poland hosts the largest coal reserves in Europe and has a noteworthy number of underground mines - over 30 units which are fully operational and win a steam and coking coal. Most of those underground mines are entered via shafts and reach as deep as 800-1000m and in few cases even deeper. As the result 29 of them are classified as gassy where 20 of them are utilizing some methods of degasification and 14 are using the drained methane for electric energy or heat generation. Longwall is the excavation method applied in those underground mines. A typical mine has a few (2-4) longwalls and excavates about 3-4 min ton per year and employees approx. 4 thousand miners. Of course there are also bigger mines and outputs reaching above 15 000 tons per day from a single longwall but in general underground mines are labor intensive and require heavy infrastructure when compared to any pit-operation.

How is the experience of Poland valid to Indonesia?

The global economic condition thus is the price of the energy coal is pretty much the same for all global players. Therefore current price between 70-80 USD per ton and even 60 USD per ton applies equally. In Poland underground mines can compete with the imported coal up to 500 km away from the mine site. Polish exports of coal are balanced with country imports at about 10 million ton level. Having in the mind that Poland would be consider as a high income country the labor cost per capita there is a few times more than in Indonesia, a one could say that this type of mine would not bring the financial benefits. In my opinion it is the contrary. If a mine entity goal is to supply coal for local demand as the fuel for local power plants then the operation at current market price is feasible and economically sound.  When the market prices increase above 80 USD then the delivery of coal for longer distances becomes a valid option (even increase of exports). Generally the deeper coal seams are then the caloric value and quality increases. Indonesia gradually gets involved in underground mining not only for coal but also for other minerals and keeps using deeper located mineral assets. On the other hand looking via Polish perspective (underground one) at current international market price of coal almost all open-pit operations in Indonesia shall bring profits. Yet, the situation is not so nice here although the difficulty level on the operational side in Indonesia is like a heaven compared to what you find in typical underground activity. The key factor to the underground mine is the operation management. From all angles doesn’t matter how you look at it; you shall always ensure to have the know-how, skilled engineers, reputable geologist and devoted to the job miners. Therefore Indonesia should outsource those skills on the way of the underground mine development. While the big coal producers are moving into the power project as they found coal business to be cyclical and the need for the electric energy high in Indonesia they shall also look into the high caloric resource of the coal that lies deeper to run their power plants at the most proficient levels. Cleaner coal comes along with high caloric values and efficient burning.

What are the directions for coal mining industry in Poland?

In Poland we observe an increased number of investors who wants to build new underground mines. There is a few of them (private ones) who wants to reach for energy and coking coal and engage into the long term contracts to supply the output to Power Plants. Last 20-30 years you could notice a massive close down of governmental coal mines throughout the entire Europe (UK and Germany) but last few years there is a change on the investor side. The country has advanced power plants mostly equipped with environmental installations like Flue Gas Desulfurization (FGD), low NOx burners, electrostatic precipitators and other technologies that are optimized for ultra clean burning and high efficiency rates (typical for Europe) therefore they require a very specific coal from sustainable mine operation. So in this sense there are similarities to what is happing in Indonesia with the difference that coal provides for 2/3 of Poland energy demand and rounds to 85% as a primary energy source.

Where is the edge of Polish Know How?

I would like to focus just on the significant ones:

Secondary public education system focused on teaching and job training for miners technicians in Poland is substantial as thousands of miners are employed and typically they go for retirement plan after 25-30 years of work. Further the education system trains professional staff, engineers and scholars at devoted universities and polytechnics.

Machinery sector in Poland is on the international standards and in certain cases has a top world leading achievements. Poland is a great source of manufactures for underground and open-pit mining, for material and people handling systems starting from basic loaders to complicated conveyor systems and finishing on the mineral beneficiation plants. Therefore you can find there great producers of conveyor belts, rollers, roadheaders, stackers, portal scrapers, crushers, electrical equipment and others.

Designing offices and mining institutes are also very specialized and focused on their own market niche. Therefore an Indonesian investor could choose a specific one with the most reputation or the best references valid to him. 

The mentioned ones are just the main few, the picture gets more crisp when you discuss the project in details with your Polish counterparties. Then you can observe not only the technology benefits but also the financial and economical output of such cooperation.  I strongly encourage in taking the effort to look into the Poland and search a supplier for your project, tender or partner.

  

What would be a valid advice for Indonesian investors or customers?

The main issue of all international relations is the trust and flow of information. Enthusiasm about Indonesian projects is not crossing the national boarder therefore Indonesian investor seeking goods or services in Poland shall clearly and slowly explain every detail. After all it transfers into SWOT analysis on the business ground case. Later you can expect to receive a tailor made offer or a solution. 

For Coal Asia, Robert Machnik - PM at PT. Gistec Prima