Indonesia, the world's largest thermal coal exporter, aims
to see higher level of growth in its coal production with an estimation of improving
global prices.
Deputy Minister for Energy and Mineral Resources Rudi Rubiandini said that we
expect output to increase by 1.2 % to reach 391 million tons from that of 386
million tons last year.
Rudi also said that the government had expected the
Indonesia coal reference price (HBA) to reach at $100 per ton this year
following the potential economic recovery as showed by the recent US
fiscal-cliff budget deal.
The country’s average HBA last year managed to reach $95.5/t, which was far
below the average price level of $118.4/t during 2011.
“Since the US has prevented the so-called fiscal cliff, we can expect their
economy to improve. There is some hope that the global economy will recover.
This will drive demand for coal and minerals,” he said.
The fiscal cliff refers to the drastic measures involving steep tax increases
and cuts in government spending that the US would have been forced to implement
on Monday at midnight, when George W. Bush-era tax cuts expired, barring a
deal.
In addition, Rudi said, the growth in China market is also expected to increase
the country's demand for Indonesia's coal and minerals. Companies from China, as well as India, have traditionally become the consumers of Indonesia's mining
products.
Price decline in Last year had forced local coal miners to cut their output in
a bid to prevent losses, and readjust the supply and demand in the course of
the global economic slowdown.
PT Adaro Energy, nation's second-largest thermal coal producer after PT Bumi
Resources had cut its annual output target between 48 and 50 million metric
tons from its previous target of 50-53 million tons.
However, the year-end reports by ministry revealed that output has rose by 9 %
to 386 million tons compared to 353 million tons in 2011. The figure also
exceeded the government's output target of 322 million tons.
Out of the total estimated production this year, the government expected 306
million tons, or 78 % of the output, to be shipped overseas while the remaining
22 % or 85 million tons will be for the domestic consumption.
The export target for 2013 is higher by 0.6 % from the exports realization in
2012 that topped 304 million tons, according to the ministry.
For 2013, Indonesia has trimmed the amount of coal that miners are required to
give locally under its domestic market obligation (DMO) policy to 74.2 million
tons or 9.4 % lower than the quota of 82.02 million ton imposed last year amid construction delays on several power plants.
Under the new quota, 45 coal mining companies operating under contracts of work
(CoWs) will be required to supply 61.76 million tons in 2013, while 28 others
working under mining permits (IUPs) will supply 10.31 million tons.
Chairman of the country's coal association (APBI), Bob Kamandanu, said that the
organization saw coal production in 2012 to be nearly 340-350 million tons, or
lower than the previous year target of 360-370 million tons.
Bob, however, is positive on improved production this year, which is estimated
to reach 360-370 million tons.
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