Indonesian Ministry of Trade announced its stance on Thursday to stand by to its planned regulation of imposing a mandatory use of national insurance companies applicable for coal and palm oil exports effective from 1 Feb’19 amid calls by coal miners to postpone the implementation of the rulings.
Hendra Sinadia, chairman of the Association of Indonesian Coal Miners (ICMA), citing a trade ministry official said that the government will stand by the regulation.
“Even so, the government would give coal miners one-month time to adjust,” Sinadia told CoalMint in an interview Jan 31.
Indonesia’s coal association held a meeting with officials from trade ministry on Jan 30 to discuss the hangover. The meeting was part of the association’s effort to strike a balance between catering to coal miners’ interest and the government’s interest.
ICMA’s Sinadia said the association issued a statement last week announcing their worries that if the regulation would go ahead as planned, that may pose problems for the export sale of the commodity.
Sinadia said the association’s worries centre on the identification of local insurance companies which will help coal and palm oil exporters. He added that Indonesian coal miners would not have to deal with local insurance companies if they continue to operate under the existing insurance system. Given the nature of the scheme is free on board (FOB) where importers or buyers appoint the insurance and marine cargo.
The new regulation would instead force local coal miners to appoint the insurance companies. “That will take time and would put extra cost,” Sinadia said.
Sinadia said total value of coal exports was USD 17.88 Billion in 2018. It was USD 17.2 Billion in the January to October 2018 period, Sinadia said citing data from Central Statistics agency. He did not give any further forecast.
Indonesia’s main buyers of coal are India and China, two of the Asia’s largest economy.
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