World’s leading Thermal Coal exporter, Indonesia- Coal miners have welcomed the New Year with plans to increase production with expectations of good demand.

Miners have kept their production targets high and increase their production capacity to cater to the market demand. Market participants are expecting good demand from major buyers like China, India, Japan etc.

The Deputy Chairman of the Indonesian Coal Mining Association (ICMA), Herman Kasih said, “The country’s Coal production could hit 450 MnT next year.”

Mr. Herman added that, “Coal miners are targeting higher production. Their growing demand in the global market, including Japan, which will increase Coal purchases after it shuts down its nuclear generated power.”

Japan has discontinued almost all its nuclear reactors. Last operating KEPCO Ohi Power Station’s Unit 4 reactor was shut down in September 2013. Japan has largely shifted to Coal as the fuel to meet its power demand after the Tsunami in 2011.

Indonesia has always been the important Coal destination for Japan. And the increased Coal demand from Japan will lead extra pressure on Indonesia for supply. Currently, Japan is importing Coal from Indonesia around 60 MnT and owing to the Nuclear reactor closures, it is expected by the industry, Indonesian coal export to Japan may rise to 100 MnT.

PT Bumi Resources, one of the biggest Indonesian miner and also a major share holder of two giant Coal miners, i.e. PT Kaltim Prima Coal & PT Arutmin Indonesia, now expecting up to 15 per cent increase in production in 2014 from 2013, and estimated at 74 MnT mined coal.

Another country’s fifth largest Coal miner, PT Berau Coal is targeting to mine 25.7 MnT of coal in 2014. According to the company’s General Manager of corporate communication, Singgih Widagdo, company’s production target will be almost 12 per cent compared to 23 MnT mined in 2013.

Indonesia’s state-owned Coal miner, PT Bukit Asam has set a production target of 22 MnT in 2014, almost 22 per cent more from 2013 production, which is almost 18 MnT in 2013.

The Indonesian miners inching up their production and will increase supply in the Asian market. As Indonesia’s biggest client, China is not expected to recover quickly with its Coal demand. Consumption of additional quantity is in contrast with growing supply, which will put pressure on Coal prices and it is expected Coal prices to remain flat.

Suppliers are offering Indonesian 5800 Kcal/kg (GAR) at USD 70-71/MT FOB basis and 4200 Kcal/kg (GAR) on USD 39/MT FOB basis.