Wednesday, January 19, 2022

Indonesian coal miners are demanding an exemption from the export ban due to rising costs

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JAKARTA () – Indonesia’s major coal miners have called for an exemption from a coal export ban introduced earlier this year as the costs of many ships stranded at sea continue to rise.

FILE PHOTO: Coal barges are depicted queuing for towing along the Mahakam River in Samarinda, East Kalimantan Province, Indonesia, August 31, 2019. / Will Kurniavan

The world’s largest thermal coal exporter has imposed the ban to prevent disruptions in domestic power supplies, raising concerns as major customers such as China and Japan enter the peak winter period of electricity demand.

The Indonesian government had promised to begin consideration of the ban on Wednesday, but negotiations were postponed and on Thursday Energy Ministry officials said it was unclear when they would decide to end the ban.

On Thursday, an official from the Indonesian Coal Miners Association said talks were ongoing.

According to Refinitive, the ban has led to an increase in coal prices in China and Australia, as well as about 100 vessels carrying a total of 5.9 million tonnes of coal to Kalimantan, Indonesia’s main coal port. collected.

Bumi Resources, Indonesia’s largest coal producer, said in an exchange statement that while the company continues to analyze the financial impact of the export ban, it could lead to demurrage and fines due to delays in deliveries.

“The company hopes that the government will immediately lift the export ban imposed on companies that have fulfilled their domestic market obligations,” Bumi said.

Indonesian coal miners have to sell 25 percent of their output to local power plants for a maximum of $ 70 per ton.

Adaro Minerals Indonesia, a subsidiary of Adaro Energy, Indonesia’s second-largest coal miner, said in a statement that it had asked to export metallurgical coal used to produce steel instead of energy.

Indika Energy said it should reduce production if the ban continues.

Indo Tambangraya Megah, meanwhile, announced a force majeure due to an export ban, director Julius Gozali said in an email.

Coal contributes about $ 3 billion a month to Indonesia’s international trade and helped boost exports to Southeast Asia’s largest economy last year.

The Indonesian rupiah fell about 1% after the ban and was also blocked by the U.S. Federal Reserve System.

Japan, which imports 2 million tons of Indonesian coal a month, has written a letter to Indonesia’s energy minister asking it to lift the ban on high-calorie coal and allow the government to allow ships of five cargo ships bound for Japan.

An Indian federal government official said he had not yet contacted the Indonesian government after his people were convinced that the supply of local coal was sufficient.

“We are watching closely,” he said. But now we are in a good position, ”he said.

As of Thursday, Indonesia had not issued any permits for bulk coal carriers, Transport Ministry official Mugen Suprihatin Sartoto said.

According to Kpler’s ship surveillance, Asian economies together with China, India, Japan and South Korea accounted for 73% of Indonesia’s coal exports in 2021.

On Thursday, state-owned enterprise minister Eric Tahir said the state utility PLN had taken on enough coal obligations, but he wanted the PLN to have a stable long-term inventory.

As of Wednesday, the PLN said it had supplied 13.9 million tonnes of coal, but needed 20 million tonnes to achieve a 20-day safe stockpile.

Reports by Francisca Nangoy, Bernadette Christina Munte and Sudharshan Varadhan edited by Ed Davies, Tom Hogg and David Goodman

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