Indonesia Expat
Business Profile

Brothers at the Coalface: Mining Consultancy Britmindo

Britmindo is a family-run mining consultancy firm powered by brothers Stephen and David Nye, along with their father and the company’s founder, Alan Nye. Stephen and David talk to Indonesia Expat about their firm and their industry.

Stephen and David, could you give us a bit of background information about Britmindo?

Our father Alan Nye started Britmindo about 10 years ago. He’d been in Indonesia for 25 years, and involved in the mining industry since the late ‘80s, originally in West Sumatra. He then moved to PT Pamapersada Nusantara and then PT Berau Coal as Operations Director before deciding to establish Britmindo in 2004, which started off as a one-man band under the staircase of his house in Kelapa Gading. We’ve since grown into probably one of the largest mining consultancy companies in Indonesia.

What does Britmindo specialise in?

We specialise in mining, particularly coal. We have branches in Singapore and in Australia as well as our main operating office here in Indonesia, where we have around 120 staff and a strong Indonesian focus – very few expatriates. Our services cover JORC & KCMI, technical due diligence, mine valuations, mine management, mine planning, coal processing services, coal chain management, quality control management, expert witness services, health and safety, mine closure, exploration management and supervision, GIS services, manpower supply & recruitment services, as well as market reports and reviews.

Our attitude is ‘International Standards with Indonesian Expertise’.

Your company claims to improve mining in Indonesia – how?

Mining is all about efficiencies – how efficiently and cheaply you can extract coal from the ground and then reclaim that land. A lot of it is down to people management, equipment management and time management. Indonesia is a difficult environment, with logistical issues in getting coal to a port. We look at reducing mining and logistical costs to make it more efficient plus provide consultancy services directly to mine owners and contractors, helping them with their reporting, compliance, and environmental practices.

With the coal industry the way it is now, has your workload reduced?

The exploration side has certainly slowed down, however we find the industry still very buoyant. Coal prices are low at the moment, so people don’t want to spend money exploring something if they can’t make a margin on it. In operations, we have six coal mines under our management, with approximately 100 people over these sites located predominantly in Sumatra and Kalimantan, equating to around 750,000 tonnes of coal production and 3,000,000 bcm of overburden each month – a lot for a small company like us.

Coal mining generally has a bad reputation. What would say about that?

If done correctly, coal mining is actually quite environmentally friendly. It only takes a few bad operators to tarnish the image. Unless you do underground mining, then naturally you must clear trees, but logs are generally used in the establishment of camp facilities, or given back to the community as part of a CSR programme. Then we strip the topsoil and the sub-soil, dig the hole, take the coal out, bring the sub-soil back in, put the topsoil back on the surface, spread out, and replant with native trees or sustainable crops. You should have a nursery set up on the mine site for reclaiming once the site closes. The water from a site can be quite acidic, so you monitor the PH levels, treating it accordingly before discharging the water back into the environment.

A lot of local miners do not follow the rules, entering the industry with very little understanding. They contravene regulations. We like to see things done as efficiently and properly as possible, with minimal social and environmental conflicts.

With exploration, what kind of challenges do you face in Indonesia?

Definitely logistics and getting access to remote locations but also overlaps with production forestry permits which requires certain access permits such as Pinjam Pakai. We also deal with social issues like land compensation for the local community; appeasing local people and providing reassurance you’re not doing anything untoward. 90% of the problems with mining here are generally not technical in nature.

Do you think there will be a strengthening in coal prices?

We foresee a slight strengthening towards the end of this year, but not much – maybe 10%. It won’t go back to the 2011-2012 prices because that was basically driven by China and their fast track infrastructure programmes. If you look at historical pricing, where we are now is comparable to 2008-2009. Back in 2003, the price was as low as $23 per tonne, so it’s not as low as it’s been historically. We don’t think we’ll see the same highs again. If we can get 10-15% back, it’s sustainable.

Benchmark coal prices 2009-2015 (courtesy of Britmindo)

Illegal coal mining is a big problem in Indonesia. What is the Government doing about it?

There are probably fewer illegal miners today than ten years ago, but they still exist. They don’t do things properly, which is why they don’t come to us for consultation. They come in the middle of the night, fire up their equipment, and cause environmental degradation like you wouldn’t believe. It’s prevalent in South and East Kalimantan.

However, recently the Government has done a great job in bringing this under control. There are more regulations and licensing requirements, therefore less opportunity for them to successfully operate today.

Firstly the Government instituted the CnC (Clean and Clear), checking every operator’s taxes were paid, reporting was done, licenses and environmental laws were adhered to – and also that no operators were overlapping with one another.

More recently, the Government put in an Eksportir Terdaftar (export permit) for any mine wanting to sell coal abroad, which needs to be signed off centrally to stop illegal export. The idea is to track where the coal has originated, and to ensure exporters are paying royalties. In the past, it is estimated up to 70 million tonnes of coal was being exported illegally and missing out on royalties.

Looking forward, how are Britmindo planning to expand?

Through association with other companies, we’re looking to branch out into the minerals sector: nickel, gold and copper. We’re also looking at working with power generation companies, utilising low-grade coal throughout Sumatra and Kalimantan, and looking at bringing foreign investment and expertise to provide mine-mouth power that can feed directly into a PLN grid.

Thank you, Stephen and David. To get in touch, contact: [email protected]

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