South-east Asia Coal
Adani’s massive coal mine on a tiny Indonesian island
Jan 13, 2021
Adani's coal mine on the tiny Indonesian island of Bunyu. Photo courtesy JATAM

Off the north-east coast of Borneo is the small island of Bunyu. Adani’s huge coal mine here has been blamed for degraded water supplies, reduced fish stocks and plummeting agricultural production. According to an Indonesian advocacy group, the very existence of the mine violates an Indonesian law aimed at protecting small islands from the predations of mining companies.

Bunyu lies in the Indonesian province of North Kalimantan. It is home to 11,000 inhabitants, including the indigenous Tidung people, as well as numerous migrants from Java and Sulawesi. For generations, Bunyu provided its people with abundant fish, rice and fruit. However, large-scale extraction of coal since the 1990s has severely degraded the island’s natural resources. The Adani Group arrived in 2006 and owns the largest mining operation on Bunyu.

According to some advocacy groups such as JATAM, Adani’s large mine should not even be permitted on Bunyu. Indonesia is a vast archipelago of over 17,000 islands. Its coastal region encompasses over 160 million people, about 60% of the nation’s entire population. According to JATAM, there are over 9700 mining leases in Indonesia, with exploration licences of coal companies covering over 35% of the islands’ area. JATAM says that 55 small islands are at least partly covered by such leases.

Bunyu lies off the coast of North Kalimantan, Borneo

Small islands are particularly vulnerable to the social and environmental impacts of mining. As a result, government authorities have attempted to define small islands and the operations permitted on them. In North Kalimantan’s zoning plan, a ‘small island’ is one with an area of less than 200 square kilometres. The area of Bunyu is 198.32 square kilometres. Article 23 of Law (UU) Number 1 of 2014, states that it is not justified to have mines on small islands.

In other words, Adani’s coal mine should not be permitted on Bunyu.

Unfortunately, Indonesia’s governments also have laws designed to encourage investment in mining. Under such regulations, Bunyu is classified as a ‘Class A’ strategic area for the development of oil and gas. The inconsistency between one set of laws designed to protect small islands from mining and another set of laws designed to encourage mining has yet to be definitively resolved in a court of law.

According to JATAM, more than 50% of Bunyu's land area has become a mining concession. Coal mining on Bunyu has therefore proceeded according to the agenda set by Adani, the other coal company active on the island, and the state-owned oil-and-gas company.

More stories See all
Unravelling Adani’s network of offshore investors: Part 2
Unravelling Adani’s Network of Offshore Investors: Part 1
Tribute to a courageous campaigner against Adani’s Godda coal-power station
Pench Part 4: Adani's proposed Pench coal-power plant will cost consumers dearly
Pench Part 3: Political favours for Adani’s Pench coal-fired plant in central India

Adani’s coal mine on Bunyu 

The advent of coal mining has been much more recent than the exploitation of oil and gas, with the first mining operations commencing in the late 1990s. In the early 2000s, Adani arrived, establishing at least two subsidiaries, PT Lamindo Intra Multikon and PT Niaga Mulya.

Between them, Adani’s subsidiaries have concessions on Bunyu totalling about 2600 ha (about 14% of the island). According to a company promotional video, Adani’s coal mine was established on Bunyu in 2006 and the first exports to India occurred in 2008. Adani’s website says that its subsidiary, Lamindo, exported four million tonnes of coal to India in 2017-18, with a target of 5.5 million tonnes for the following year. The promotional video says that Adani has averaged 5 million tonnes per annum of export since 2009. This makes Adani’s operation the biggest on Bunyu. According to one source, Adani’s mine has already reached 50 metres below sea level in depth.

AdaniWatch reported on the Bunyu mine in February 2020, describing the detrimental impacts of the mine on the island’s agricultural production, water resources and fisheries. Those impacts continued through 2020, despite the advent of the COVID-19 pandemic. 

Destruction of mangroves and other habitats

Mangroves protect coastal communities from storms, high winds, tsunamis and salination. They provide breeding grounds for fish as well as wood for traditional uses. In recognition of these services, there has been sustainable management of mangrove forests on Bunyu within the Bekantan Mangrove Conservation Area (KKMB) for many years. However, the recent acceleration of resource extraction on Bunyu has resulted in widespread deaths of mangrove trees, a phenomenon identified in government publications.  Other species have also been adversely affected, including proboscis monkeys and birds.

Adani's Bunyu coal mine, North Kalimantan. Photo Google Earth

Water resources and agricultural production 

Despite its location in the tropics, Bunyu is beset by problems when it comes to providing reliable supplies of fresh water to its inhabitants. Few reservoirs have been established. The local water authority (PDAM) has only 531 customers out of a population of over 11,000.

The headwaters of several water catchments on Bunyu have been degraded by mining and associated impacts, such as tree-clearing and ground collapses. As a result, many local people are forced to collect rainwater from the roofs of their dwellings, even though this source of water is often contaminated by coal dust. Local-government officials have confirmed that the island’s huge mining operations have made it difficult to provide the local people with adequate water supplies.

The Adani subsidiary that runs the coal mine says it has provided clean water through its CSR program. However, only a small proportion of the island’s residents have benefited from this due to the very limited distribution of pipelines.

Mining has also devoured land previously used for agriculture, with documented impacts on the production of rice and fruits such as salak. Over 1200 tonnes of rice were produced annually on Bunyu in the early 2000s but by 2015 that had dropped to less than 90 tonnes. Production of salak fruit and secondary products has suffered a similar reduction. Prior to the advent of coal-mining, the village of Gunung Daeng produced salak in quantities of up to three tonnes in a year, sufficient to export dried salak chips to other islands. By 2018, the average yield was only 30-40 kg per harvest. According JATAM, expansion of the Lamindo (Adani) mine into agricultural areas has been at least partially responsible for this decline.

Impacts on the coastal and marine environments

The island’s once productive fishing industry has also been adversely affected by operations associated with coal exports. Adani’s website says that barges move coal from the jetty to ‘mother vessels’. According to local fisherfolk interviewed by JATAM, coral reefs have been damaged by ship anchors and coal barges during docking operations. Coal spilled into the sea during loading has polluted some of the waters. Fish catches have declined; one fisherman says that his daily catch has plummetted from 30-40 kg to just 7 kg. Other fisherfolk have to travel further out to sea in order to find fish resources not adversely affected by the coal-loading impacts.

The island’s major tourist asset, Nibung Beach, has also been degraded, with black grains of coal scattered along the shoreline. Locals say the black residues originate from coal-transport operations at sea.

An official from the Office of Marine Affairs and Fisheries (DKP) did not deny that not all mining activities had been carried out in compliance with standard operating procedures, which had a negative impact on the area. However, no official report on the problem is available for public view.

Adani's coal mine, Bunyu, North Kalimantan. Photo courtesy JATAM

The advent of the COVID-19 pandemic 

COVID-19 was first detected in Bulungan (the local-government area in which Bunyu lies) in February 2020. Bunyu is particularly at risk due to the movements to and from the island of mine workers whose homes are elsewhere. Strict protocols apply to the employees of the island’s resource companies. Nevertheless, the number of local COVID-19 infections continues to grow. Adani’s mining operations have not been reduced.

Adani responds

Adani says it has taken steps ‘to ensure the availability of potable water for all’, including provision of water tanks and delivery of water to households. A water-treatment plant established by Adani provides reliable water to 1250 to 1500 households in the vicinity of its Lamindo mining and export operation. However, most of the islanders do not have access to this water supply. Adani also says that it is committed to maintaining the ‘flora and fauna of the project-affected areas’ and planted 5300 saplings in 2017.

Adani says that it provides over 1500 direct and indirect jobs on Bunyu, and that it helps the local community through provision of medical services (including ambulance speed-boat services, eye checks and medical kits), school facilities (library resources, transport and furniture), teacher training, scholarships, water supplies, various community infrastructure projects and other services. Its environmental management on Bunyu has received a certificate from the government’s Ministry of Environment.

Mining and the Bunyu community

Local sources say that the Adani Group’s coal mine on Bunyu has significantly affected the ability of the island’s inhabitants to feed themselves. An official in local government and a prominent academic at the University of North Kalimantan have both attested to the impacts on the local community. They say that the degradation of water supplies, the reduction in agricultural production, and the decline in fish stocks have all necessitated the import of food supplies and caused a loss of self-reliance on the part of the local people.

Some local people are also concerned about the gradual degradation of a coastal environment that was once attractive. In particular, the main beach on Bunyu is no longer clean, having been blackened with the waste products of coal mining and transport.

People have also questioned the commitment of Adani to rehabilitating areas damaged by mining. An assessment of the company’s environmental management has given it a blue/green rating. However, many local people are cynical of this result. They are also unhappy with the distribution of benefits associated with the coal mine, saying that local employment in the operation has declined recently.

Environment group WALHI has even gone so far as to warn that Bunyu could become a ‘dead island’ if coal mining continues its relentless expansion.