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Japan Joins Miners in Seeking Exemption to Indonesia Coal Ban

Indonesia, the world’s biggest thermal coal exporter, implemented the ban on exports to avoid domestic power outages, triggering concerns by customers


Indonesia
Coal is unloaded from a barge at the Suralaya coal-fired power plant at Cilegon in Banten province on Java island. Photo: AFP.

 

Major Indonesian coal miners have sought exemptions from a coal export ban put in place at the start of the year and now Japan, a leading importer, has added to the pressure on Jakarta to lift the moratorium.

Tokyo, which imports 2 million tonnes of Indonesian coal a month, sent a diplomatic letter asking for the ban on high caloric coal to be lifted and for authorities to give departure permits to five loaded vessels headed for Japan.

The “sudden export ban has a serious impact on Japan’s economic activities as well as people’s daily life”, Kanasugi Kenji, Japan’s ambassador to Indonesia, wrote to Arifin Tasrif, Indonesia’s energy and mineral resources minister.

Indonesia, the world’s biggest thermal coal exporter, implemented the ban on exports to avoid domestic power outages, triggering concerns by customers such as China and Japan, just as they head into the peak electricity demand of winter.

Jakarta had pledged to start a review of the ban starting on Wednesday but talks were postponed and energy ministry officials on Thursday said it was not clear when they might make a decision to end the ban.

The ban has driven coal prices in China and Australia higher this week, while about 100 vessels loaded with 5.9 million tonnes of coal exports have amassed off Kalimantan, home to Indonesia’s main coal ports, Refinitiv data show.

 

Penalty Charges May Apply

Bumi Resources, Indonesia’s biggest coal miner, said in an exchange filing that while the company was still analysing the financial impact of the export ban, it may lead to demurrage and penalty charges from the delay of deliveries.

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

Indonesian coal miners must sell 25% of their output to domestic power plants at a maximum price of $70 per tonne.

Adaro Minerals Indonesia, a unit of Indonesia’s second-largest coal miner Adaro Energy, said in a statement it had asked the government to allow exports of metallurgical coal, which is used to make steel rather than generate power.

Indika Energy said it would need to adjust its production levels lower should the ban continue.

Coal contributes roughly $3 billion per month to Indonesia’s international trade and helped drive exports from Southeast Asia’s biggest economy to record highs last year.

 

  • Reuters and AFP, with George Russell

 

 

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China Switches On Huge New Coal Power Plant in Inner Mongolia

Rising China, India Consumption Spark Coal Use Surge

 

 

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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