US Coal Exports
Exports Economic Contributions Report
Aug 01 2014

Indonesia Reducing Coal Exports Because of Increased Domestic Use (Power Magazine)

Posted in All News, Asia

Indonesia Eyes Tightening Coal Exports

Indonesia, the world’s leading exporter of thermal coal, in June again suggested it could limit coal production and further tighten its control on exports to protect supply for domestic power plants.

However, the new rules aren’t expected until after the country’s presidential election in July, and possibly not until after a new government is inaugurated in October.

About 70% of Indonesia’s coal production is exported, but the government projects that domestic demand for coal-fired power plants will rise by 13% by 2015. The new rules could come as a ministerial regulation on mines and shipments, though how effective that will be remains to be determined, experts say. As Reuters reported in June, many of the country’s coal mines, such as Bumi Resources and Toba Bara Sejahtera, are owned by politically connected figures.

Benchmark prices for Asian coal have dropped 16% to $72.38 a metric ton (mt) as of June this year, trading at its lowest levels since late 2009. One reason cited for depressed prices is the rampant illegal mining and exports that flood the market. About 50 million to 60 million mt of coal is illegally exported from Indonesia each year (total exports were 383 million mt in 2012, according to the World Coal Association). The government, which levies royalties of 3% to 13.5% on exports of coal produced in the country, has plans to build 14 dedicated coal terminals in the islands of Kalimantan and Sumatra to tighten supervision and curb illegal exports.

However, the falling prices have already begun forcing smaller coal producers in the country out of business, further slashing output, observers note. That could have repercussions for the countries to which the bulk of Indonesia’s coal exports are destined, including China, India, South Korea, Japan, and Taiwan. India, for example, which relies on Indonesian coal imports to keep up chronically short power plant stocks, would have to rely on increased shipments from Australia and South Africa.

See article here.

  • “The fact that we’re no longer in the age of energy scarcity – that we’re in the age of energy abundance – positions the United States in a totally different place. This gives access to affordable, reliable energy in the United States, and gives the U.S. a major competitive advantage.”
    – Dave Banks, Special Assistant to President Donald Trump for International Energy, June 2017
  • “It is in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production, constrain economic growth, and prevent job creation. Moreover, the prudent development of these natural resources is essential to ensuring the Nation's geopolitical security.”
    – Executive Order on Promoting Energy Independence and Economic Growth, March 28, 2017
  • “Historically, U.S. companies seeking to expand their revenues focused first on increasing their number and share of U.S customers. For years, this focus served as a winning strategy for many of the most successful U.S. companies. Today, global economic trends make clear that successful companies are those that reach and sell to consumers outside U.S. borders and around the globe.”
    — 2011 National Export Strategy, U.S. Trade Promotion Coordinating Committee
  • “Federal regulatory agencies should not require climate change studies in the course of their permitting processes for proposed facilities. Coal will be consumed around the world regardless of U.S. trade policy. The only question is whether the coal is produced here in North America, where environmental standards are high, or elsewhere.”
    — U.S. Senator Lisa Murkowski, January 7, 2014
  • “At present 19% of the world’s population, 1.3 billion people, lack access to electricity and on New Policy Scenario projections there will still be 1 billion people without such access in 2030. To meet the UN Millennium Development Goal of eradicating extreme poverty by 2015, 395 million more people need access to electricity. There is a strong correlation between electrification and improvement in the United Nations’ Human Development Index.”
    — International Energy Agency, Coal Industry Advisory Board
  • “Access to electricity is strongly correlated with every measurable indicator of human development”
    — Berkeley Science Review, 2008

Count on Coal

National Mining Association

Twitter Logo

facebook Logo