Sustainable Mining for Long-Term Investment
Sustainable Mining for Long-Term Investment
Many still have doubts any mining business can be sustainable. But for Bukit Asam, running a sustainable business means.a long term investment.
As a State-owned coal company that was transformed into a public company in December 2002, Bukit Asam has realized the importance of maintaining investor's trust. It is why the sustainable principle is considered crucial.
That principle has been proven with the recent awards collected by the company at the second Annual Sustainable Business Awards, held as part of the Business for the Environment Indonesian Summit last November.
BukitAsam successfully won two awards in the mining and metals industry and a special achievement as the 'Best Overall Winner.'
BukitAsam has been running its coal mining business since 1981 and has three sites, in Tanjung Enim located 200 kilometers northwest of Palembang, North Sumatra, and in Ombilin, Sawahlunto, located 90 kilometers south east of Padang, West Sumatra. Now, BukitAsam also operates close to Samarinda, East Kalimantan.
Managing around 90 hectares, Bukit Asam produces 7.3 billion metric tons of coal that are distributed domestically and overseas. The 'Sustainable Business Awards' is an annual competition that measures how far companies conduct the sustainable principle in its business.
With the award, Bukit Asam has shown that a local company can excel compared to multinational companies like Total, Holcim and Nestle.
'We understand that mining damages nature, but the environment is an investment,' Bukit Asam corporate secretary Joko Pramono said.
To back up its words, the company . allocates Rp 300 billion ($25 million) each year for its corporate social responsibility (CSR) programs.
According to Joko, such a budget is prepared every year to fulfill the company's Vision as an environmentally friendly energy company.
'We call it investment. The old-school mindset says an environment program is an expense. But for us, it makes our business grow and develop in a sustainable way,' Joko said.
From ghost town to an independent town
If a post -mining land is often associated with ghost town like in cowboy movies, Bukit Asam broke the stigma by rebuilding one area for the benefit of local people . In Muara Enim, South Sumatra, post-mining land of around 5,460 hectares is designed for a botanical forest park that has been developed into 12 zones including recreational, agribusiness, water use ,agriculture, research, wildlife and other functions.
'The agribusiness zone is very useful for thousands of employees who are able develop the area to cover their daily needs,' Joko said.
Bukit Asam is working with the Bogor Agriculture Institute (IPB), Bandung Technology Institute (ITB), Gadjah Mada University (UGM) and Sriwijaya University to build efficient technology, agriculture and horticulture. 'So, industry is developed, people's needs fulfilled and energy can be saved and it becomes efficient,' he said.
Not only in Muara Enim, the post-mining areas in Bukit Kandi and Tanah Hitam in Sawahlunto, West Sumatra, are also reclaimed for tourism purposes, such as a Wildlife park.
The open-pit mining area in Sawahlunto covers 529 hectares; while the used land reaches almost 73 percent of the total area.
The rehabilitation, revegetation and rebuilding program to create a nature attraction has long been settled and the land has been returned to the Sawahlunto government in 2008.
The local government also organizes the Tour de Singkarak, an annual international cycling race to promote the region as a tourist destination globally. 'An area has also been allocated to build a cemetery and around 5,000 graves from the colonial era have beenmoved,' Joko said.
How is a mining company determined as to whether it pays attention to the surrounding environment? 'It's very simple. Look at the development progress in its surrounding area and see the wealth level of the people,' he said.
At the regional level, the company secured the runner-up position in implementing CSR. Through that achievement, the company broke the stigma that always labels mining companies as irresponsible and causing environmental damage. Now, it has become a company that raises the bar when it comes to other sectors in Southeast Asia in terms of environmental responsibility. 'We are not thirsty for awards, but they are part of our benchmarking, how far we care about society and environment,' Joko said.
To support local people, Bukit Asam . believes education is an important starter to empower them so the company provides financial support to several schools in Muara Enim. The company provides a number 'mechanical and handicraft workshops, among others, and is also mentoring small businesses and industries to make them grow and become independent under the Bukit Asam Industry Center (SIBA). 'We need local people. We are aware we need [them], that is why we are creating industry and opportunities in surrounding areas,' Joko said.
In 2012, the company spent around Rp 19.22 billion to fund a number of workshops and training programs for local communities.
'If we look at this at one level, all the expenses might be seen as a waste. But if we consider it as a long-term goal, it's again an investment. If the people living in the surrounding site area are well-educated, it's good, as it supports the company,' Joko said.
To empower people and the environment, BukitAsam works with several universities. For example, with IPB, BukitAsam set up a laboratory that cultivates rare local plants.
The mining company also works with Bengkulu University to create post-mining land reclamation development zones. With ITB, Bukit Asam tries to manage the water system so the water can be channeled directly to end-users. As a result, almost all staples and operational needs are covered independently through the SIBA program so there is no need to bring in expensive products from Lampung, Palembang or further afield.
'At the end of the day, we are helping people become economically independent. And if people are independent, society benefits too because there will be less conflict,' Joko said.
Synergizing Business, People and Environment for Development
Now in its second year, the jury of the Indonesian 'Sustainable Business .Awards' has been kept busy assessing more than 50 national and multinational companies across eight categories.
The categories include strategy and vision tor sustainable practices, commitment to develop a sustainable workforce, corporate social responsibility, sustainable waste management, reduced energy use, sustainable water management, a well-monitored supply chain, and a commitment to protect biodiversity and ecosystems.
Not only a major player in the mining industry, state-owned Bukit Asam also garnered the highest score across the categories and was awarded as the 'Best Overall Winner.Bukit Asam has been a pioneer in developing a botanical park for recreational and conservation purposes on land they have finished mining. The company, based in Tanjung Enim, South Sumatra, claims it is the first open-pit coal miner that conducts post-mining recovery with 5,640 hectares to be converted into an area that is economically beneficial. 'In other companies, they just leave after they have extracted what they want. We are different. We are cleaning up, removing toxic waste and acids 'and rebuild the area into a tourist attraction,' Bukit Asam corporate secretary Joko Pramono said.
Despite being in a sector that has been hit hard by a financial meltdown that began in Europe and the United States before impacting China's insatiable demand for natural resources, Bukit Asam has tried to keep to its commitment to focus on empowering people and people's welfare by running the company along sustainable principles.
This commitment has paid off. When other mining businesses were announcing layoffs, Bukit Asam was hiring. We recruited 300 staff when other mining companies laid off hundreds ,Joko said.
When it comes to empIoyment the company prioritizes local workers. Almost 90 percent of its site staff are local people who live near the site area In terms of energy usage, the company built a coal-fired power plant in Mulut Tambang, South Sumatra, with a capacity of 30 megawatts to supply electricity for its mining activities in Tanjung Enim. The excess power is given to state owned national power company Perusahaan listrik Negara and can be distributed to villages so more people can benefit.
For non-operational necessities, Bukit Asam uses solar energy for outdoor lamps, for example, on its street lights. Expanding its energy sources, Bukit , Asam plants palm oil and jatropha to develop alternative energy. The company also recycles huge amounts of water that is used for mining activities. The pumping system technology was made to get rid of the acid so the water can be supplied tor the fishing activities.
Through the small businesses the company mentors, Bukit Asam produces spare parts that were previously imported from Germany and Sweden, saving the mining company up to Rp 90 billion ($7.4 million).
'As a public state-owned company, every single decision can affect investors so we are committed to becoming an environmentally-friendly energy company and a benchmark for other firms,' Joko said. JG
Source: Jakarta Globe, pg. 8, 30 January 2014