Jakarta, CNBC Indonesia – The world’s plans to transition fossil energy to new renewable energy are getting more serious. However, this has an impact on the economy.
One sector affected is coal. The green energy trend is expected to have an impact on layoffs (PHK) in this sector.
In the latest Global Energy Monitor report, it was recorded that there were 2.7 million direct workers in coal mines operating throughout the world. Well, by 2035 the coal industry will lose almost half a million jobs, with estimates that an average of 100 workers per day will be laid off.
It is feared that this estimate could also have an impact on workers in Indonesian coal mining. Moreover, Indonesia is one of the largest coal producers in the world.
The coal industry has even absorbed up to 150 thousand workers in Indonesia as of 2019. This is stated in the 2020 Ministry of Energy and Mineral Resources (ESDM) Coal Booklet data.
“The coal industry absorbed up to 150,000 workers in 2019. The composition of foreign workers was 0.1%,” wrote the 2020 Ministry of Energy and Mineral Resources Coal Booklet.
If Indonesia really abandons the coal industry, this means that 150,000 domestic coal mining workers could be affected.
However, the Indonesian Coal Mining Association (APBI) assesses that this energy transition is not the reason for layoffs in the domestic coal mining industry.
APBI Executive Director Hendra Sinadia said that one of the things that threatens coal mining sector workers is if coal prices continue to decline.
He said that hundreds of thousands of workers in the coal sector could be affected if coal prices continued to decline. The reason is, this can result in selling prices being lower than production costs, so that in the end it can make coal companies lose money.
“Maybe in one ecosystem, it could be almost 700 or 800 thousand times, right? If you count all of them, there are contractors, there are transportation entrepreneurs,” explained Hendra to CNBC Indonesia, quoted Monday (16/10/2023).
He said that the potential for layoffs was also increasingly being warned about, especially by small-scale coal companies. Hendra said that if the selling price of coal continues to decline but the burden that must be paid for royalties and ‘deposits’ to the state continues to increase, it could be a burden on the company.
“Well, that’s what we’re worried about, because if prices continue to fall, we as several companies, especially small scale ones, will have difficulties. Moreover, the burden of royalty rates and obligations to the state will also continue to increase,” he added.
Moreover, he highlighted that coal prices have recently continued to be corrected, coupled with deposits to the state which continue to increase, the threat of layoffs of coal workers could occur.
“If the price scenario is really low and that could happen, that’s what we’re worried about. Moreover, the price trend is also continuing to fall, although it’s still quite good, isn’t it? If prices continue to fall, that’s how it is, compared to what it meant at the time (during the pandemic) “Covid, we will have difficulties,” he said.
Apart from that, Hendra also mentioned the potential for layoffs which might also occur due to limited coal mining business permits which are relatively short. “And also companies that currently also have limited permits, permit periods, like that. So that’s our opinion,” he explained.
It should be noted that coal is currently Indonesia’s mainstay commodity. In fact, in 2020 Indonesia will be the third largest coal producer in the world after China and India. It’s no surprise that this industry absorbs a lot of workers.
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