SDE launches Indonesia's first underground coal mine

Indonesian coal producer Sumber Daya Energi (SDE) has started commercial operations at the country's first underground mine in Kotabaru, South Kalimantan, the firm announced.

This comes as the world's biggest coal-producing nation is looking at environmentally friendly ways to explore its coal resources and boost output.

The 184.92km mine, which has received investments of about $300mn, is estimated to have roughly 293mn t of coal reserves and 589mn t of coal resources. The mine is expected to produce up to 10mn t/yr once mining operations stabilise. It currently has a business permit (IUP) which will expire in May 2034. Construction work at the mine started in 2021.

The launch of commercial operations at the mine comes following the conclusion of the UN Cop 28 climate summit in Dubai, where nearly 200 countries agreed to transition away from fossil fuels. Underground mining is considered more environmentally friendly compared with opencast mining because of lower overburden volume removal and less surface disturbance.

The start of commercial operations at the underground mine could buoy interest in this form of mining, said the Indonesian energy ministry (ESDM). Commercial coal mining in the country is mostly done via open pit method because of the lower cost of production. In contrast, underground mining is more capital intensive because of the mining infrastructure that needs to be set up to ensure safety during mining and exploratory works.

By Antonio delos Reyes