Indonesian coal miners demand an end to a government coal export ban

Coal miners in Indonesia want the government’s coal export ban…

Coal miners in Indonesia want the government’s coal export ban quickly lifted since it has caused fuel costs to soar and threatens to disrupt the energy supply in some of the world’s most developed nations.

Anxieties about its ability to satisfy its own electricity needs prompted Indonesia’s biggest thermal coal exporter, Indonesia, to threaten to cancel business licenses for any miners who failed to meet those needs on Monday.

Kpler ship monitoring data shows that 73 percent of Indonesian coal shipments in 2021 went to China, India, Japan, and South Korea, accounting for 73 percent of the country’s exports.  Indian coal traders have seen the price of coal to the country’s west coast rise to $6.73 a tonne since Australia’s New Year’s Day holiday.  The exporter declares force majeure when it cannot provide petroleum due to circumstances beyond its control, although she was unaware of any such cases.

Following a turbulent year for coal, China has imposed a moratorium.  According to Caixin, the most regularly exported grade of Indonesian coal reached a record $158 per tonne in October.  However, the price plummeted to $68 on Dec. 29, according to data from Caixin.  A scarcity of coal in Indonesia’s power plants may lead to severe blackouts; therefore, the country issued the restriction.  On Wednesday, the country’s administration planned to revisit the decision.  State-owned utility Perusahaan Listrik Negara (PLN) requires coal miners to deliver 25 percent of their yearly output at a maximum price of $70 per tonne, lower than the current market rate.

Sanctions may be imposed on companies who fail to satisfy their responsibilities to meet domestic demands.  They may also have their company licenses revoked if required, in addition to not receiving an export authorization.  Liquefied natural gas producers, like coal miners, must put the domestic market first.

Chairman Pandu Sjahrir of the Indonesian Coal Mining Association (ICMA) stated that the organization met with trade ministry officials over the weekend to attempt to find a solution.  “Right now, the most crucial goal is to keep the electricity on.  As a short-term solution, 10 of PLN’s most prominent members are being asked to assist with the organization’s staffing needs, “he said.

Mines that can’t sell low-grade coal because it’s less than 4,200 kcal/kg in heating value aren’t selling to PLN.  Due to the miners’ desire to do everything it takes to get exports flowing again.

Approximately a third of the country’s yearly demand is met by Indonesian miners’ total monthly production, slightly under 40 million metric tons.  The ICMA is worried that if manufacturers declare force majeure due to the prohibition, they will conflict with customers.  South Korea’s industry ministry predicted minor delivery delays but estimated that 55% of Indonesia’s January coal shipments that had already been loaded would arrive on schedule.

However, given the country’s (South Korea’s) coal stock and the shipments of coal from other countries, including Australia, the need to watch events, even if Indonesia’s export embargo, is expected to have a limited short-term effect.  According to the ministry, A prohibition on coal imports from Indonesia might lead to re-routing shipments to India, accounting for more than 15 percent of Indonesia’s coal exports in 2021.

If India is willing to pay a higher price for coal from other countries, such as Australia, and boats bound for other nations in the area, such as Bangladesh, maybe diverted to India, “Vyas, the CEO of iEnergy, made the statement.  As for the rest of the experts indicated they’d wait and see what happens in Indonesia first.

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