The Utah Coal Lockup: A trillion dollar Lippo payoff?

By: Sarah Foster

When the President signed the Executive Order designating 1.7 million acres of land in southwest Utah as the Grand Staircase-Escalante National Monument, his action placed the area off limits to mineral extraction and development.

The New York Times reported that the monument encloses the largest coal field in the nation, the Kaiparowitz Plateau, which contains at least 7 billion tons of coal worth over $1 TRILLION.

Kentucky-based company Andalux Resources, which holds leases on 3,400 acres in the area, was planning to open a huge operation (underground, not strip mining) that would have generated 1,000 jobs, $1 million in annual revenue for Kane County, and at least $10 million a year in state and federal taxes, according to the New York Times. Folks living in the area wore black arm bands the day o the signing - but Clinton didn't see them. He chose to make his announcement in a neighboring state. WHY?

Why did he do it? Why lock up $1 trillion worth of coal?

An obvious explanation is he was hoping to secure the environmentalist vote. Though that was no doubt part of his reasoning, he had surely achieved such an objective earlier this summer when he declared the huge area outside Yellowstone National Park a World Heritage Area. Let'' look further.

In the weeks prior to the past election, revelations surfaced almost daily regarding donations from foreign sources to the Democratic Party and Clinton's past campaigns. At the center of the controversy was another set of people to whom Clinton owes a few favors: the Lippo Group, a powerful $5 billion Indonesian conglomerate, founded and owned by the Riady family who, it turned out, had raised and funneled millions of dollars into campaign coffers.

Democrats attempted to downplay the allegations of impropriety. Even if the Clinton campaign and the Party did receive illegal contribution- which is denied -what, they demanded, had Clinton done for Lippo Group, the Riadys, or Indonesia that really affects this country adversely? Good question. The Payoff

Clinton's announcement at the Grand Canyon was wrapped in political correctness. "Mining jobs are good jobs, and mining is important to our national security - but we can't have mines everywhere, and we shouldn't have mines that threaten national treasures," he told his sycophantic audience.

But coal is not only important for our nation's security. More importantly, at the present time it is the most cost-effective fuel for the electric plants that supply our homes and industries with light, heat and power.

Moreover, the coal at Kaiporowitz Plateau is a kind of coal that is not found "everywhere." It is very low sulfur, low ash - hence, low polluting - coal, the kind in high demand for power plants, such as one being designed for Ensenada, Mexico. That megawatt giant, presently on the drawing boards, will supply electricity across northern Baja, an area plagued by brownouts.

Had it not been taken off the world market, the logical source of coal for the Baja plant would be the Kaiparowitz Plateau. Once mined it could be transported by rail to the ports of Long Beach or Los Angeles, then by barge to Ensenada. Thanks to Clinton, there will be no exporting of Kaiparowitz coal, which means the facility's procurement people will have to look elsewhere for clean non-polluting fuel.

Only two other sources

Besides the Kaiparowitz Plateau, there are only two other known locations in the world where comparable coal is found in sufficient quantities to make mining it worthwhile. Colombia in South America is one, but it'll be years before the necessary mining and shipping infrastructure is built.

The other? You got it. Indonesia.

That's right - the coal fields of South Kalimantan (Borneo), Indonesia. Big plans are online for its development. Indonesia has been a source of coal for over a century, but the coal varies sharply in terms of quality. Recently, however, a coal that is very low in sulfur has been discovered. A number of coal companies are already there, and it's a good bet Lippo Group money is involved. A major company is Adaro Indonesia, of which 20 percent is owned by the Spanish government, 50 percent by New Hope Corp., an Australian firm.


According to the 1994 report Mineral Industry of Indonesia, by the bureau of Mines, U.S. Dept. of Interior, Adaro aims to produce 15 million tones by the year 2000 of what they call Envirocoal - a reference to its quality. Adaro has for several years anticipated the U.S. as a major market, and has one committed purchaser already: Tampa Electric Co., which signed a long-term contract to purchase 400,000 tones a year from the Indonesian firm.

To handle the shipping of the increased production, new shipping terminals are being constructed. One huge one is on a neighboring island at a cost of $1 billion. The P.T. Indonesia bulk Terminal, as the megaport is called, is owned 50 percent by New How, and 50 percent by "Indonesian interests" (the Lippo Group perhaps), according to the Interior Dept. report.

Massive coal deposits, massive shipping facilities - that spells massive investment, massive contracts. This isn't some small-0is-beautiful eco-operation. We're talking real money here, and it's hard to imagine that the "Lippopotamus" is not in on the action. But even if Lippo's not directly involved, the Indonesian government, with which Lippo has a cozy relationship, certainly does. So too will the various foreign investors and mining companies to whom the Indonesian government has extended an open invitation.

Winners and Losers

In any game there are winners and losers, and there are Americans in the first category - the investors who put their money in overseas coal mining, producers of natural gas, which the administration supports wholeheartedly.

Plus, there's a deal between a Little Rock firm and Lippo. According to the ENERGY ECONOMIST for Sept., 1994, Entergy Group of Little Rock, in partnership with the Lippo Group of Hong Kong, signed a memorandum of understanding with the North China Power Corporation for the cooperative management and expansion of the $1 billion 1,200 megawatt coal-fired Daton 2 power plan in Shanxi Province. Isn't that interesting And where do you think the coal will come from?

The Democrats' question: What has Clinton done for Indonesia that harms the United States? The answer is - with a stroke of his pen he wiped out the only significant competition to Indonesian coal interests in the world market before it even got started, a move that at the same time relegates this country to importer status. His edict will force us into eventual dependency on foreign producers of coal as we are presently dependent on overseas sources for oil - an unconscionable situation considering that we have abundant deposits of both commodities.

The President has given our children a legacy of continued energy dependence, marked by contrived shortages and crises, the full impact of which will be sharply felt in the years to come.