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This is not the Energy Transition, this is the Trigger for Layoffs in the Coal Industry

The Indonesian Coal Mining Association (APBI) revealed that the potential for Termination of Employment Rights (PHK), especially in the domestic coal mining sector, is not occurring because of the domestic energy transition program.

APBI Executive Director Hendra Sinadia said that the potential for layoffs that might occur even before the energy transition is carried out massively in the country is if demand for coal exports from Indonesia to China and India experiences a drastic decline, or the selling price decreases to lower than the production price. , and conditions of excess domestic coal supply.

According to him, these three things are the trigger for layoffs of workers in the domestic coal mining sector.

“Well, what we are worried about is if there is a prolonged decline in prices. Maybe because there is an oversupply, or for example China suddenly reduces the use of coal,” he explained to CNBC Indonesia in the Mining Zone program, quoted Friday (13/10/2023).

However, Hendra said that in the near future, his party did not see any potential that could lead to layoffs of workers in the coal mining sector.

“But we are not looking in that direction in the near future,” he added.

Hendra said that his party continues to anticipate potential changes that could put coal mining sector workers at risk.

“But of course we have to anticipate if changes occur or for example, say there might be another outbreak or something like that. That’s what we’re worried about for a prolonged price decline in the near future. But I think looking at the current outlook we don’t see any indications in that direction. there,” he said.

It should be noted, based on the Global Energy Monitor report, there are as many as 2.7 million direct workers in coal mines operating throughout the world. Well, by 2035 the coal industry is expected to lose almost half a million jobs, with estimates that an average of 100 workers per day will be laid off.

Global Coal Mine Tracker Project Manager, Dorothy Mei, stated that the energy transition in the world cannot avoid the closure of coal mines in the world, this will also of course have an impact on the social conditions of workers.

“Good transition planning is underway, as in Spain where the country regularly reviews the impact of ongoing decarbonization. The government must take inspiration from their success in planning a just energy transition strategy,” he explained as reported by Global Energy Monitor, quoted on Wednesday ( 11/10/2023).

The report also revealed that most of these workers were in Asia, namely 2.2 million jobs. The countries that produce the largest coal in the world, such as China and India, are expected to bear the greatest impact from the closure of coal mines.

China has more than 1.5 million coal miners producing more than 85% of its coal, which accounts for half of world production. Shanxi, Henan and Inner Mongolia provinces produce more than a quarter of the world’s coal and employ 32% of the global mining workforce of 870,400 people.

India, the world’s second-largest coal producer, has a workforce about half the size of China’s Shanxi province. The country officially employs around 337,400 miners in operating mines.

In fact, one of the coal companies in India, Coal India, faces the largest potential layoffs, namely 73,800 direct workers in 2050.

Source : CNBC