Indonesian coal exports have been facing a plethora of challenges amid the ongoing pandemic — a substantial decline in import demand from the country’s two major markets – China and India – being the topmost.
This constraint is primarily due to the governmental policies adopted by both the countries which aim to help strengthen the coal industry in their domestic markets.
However, the Indonesian coal miners believe that export opportunities to these destination countries can still be increased if they are supported by the government. As a result, they are hopeful that the Indonesian government can lobby the two countries to give them access to export quotas again.
“ICMA (Indonesian Coal Mining Association) and IMA (Indonesian Mining Association) are making efforts with the government. We are coordinating with the Indonesian Ambassador in China to provide more export access”, said Hendra Sinadia, director at ICMA in a recent virtual discussion.
Moreover, according to him, Indonesia is considered to have historical closeness to India. “In a crisis there is an opportunity. Demand from China and India and the Indonesian coal mining sector are closely interrelated, but also to policies of the export destination countries”, he added.
Indonesia’s Ministry of Energy and Mineral Resources had earlier stated that this year’s coal exports till June were still weaker compared to the same period last year.
Director of Coal Business Development at the ministry, Sujatmiko, said that the volume of coal exports for the January to May 2020 period decreased by 10%, as against 193.82 mn t in the same period of 2019.
Meanwhile, until May 2020, the realization of Indonesia’s coal export volume reached 175.15 mn t with a value of $7.77 bn. “Exports until May were 175.15 mn t”, he said. Not only in terms of volume, the export value for the January to May 2020 period fell by 18%, compared with $the realization of 9.46 bn in the corresponding period last year.
The decline in export performance was due to reduced demand for coal from user countries as well as a drop in selling prices due to the pandemic and low oil prices in the global market. The HBA reference coal price in August 2020 was recorded at $50.34/t, down by 3.5% from $52.16/t in the previous month.
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