Indonesia may allow companies to raise their production by maximum 5% this year, from actual production in 2017, as the country seeks to control output.
With 5% maximum raise in production, Indonesia may produce 485 MnT of coal this year, from 461 MnT of actual coal production in 2017, Bambang Gatot Ariyono, director general of coal and minerals at the Energy and Mineral Resources Ministry, said in a press conference on Thursday, Jan. 11.
Indonesia has been struggling to curb coal production as it wants to preserve deposit for future power plants. But the country’s annual coal output has been steadily exceeding the government’s target, even when prices were low, as producers tried to cash in to repay debts.
“The situation is tricky. Many companies were in construction stage last year. We couldn’t just stop their production because it’s about their investment,” Ariyono told reporters. “The government is trying to control it. So in 2018, we can tolerate 5% increase from an actual national production in 2017,” he added.
The government’s official coal output target for 2018 is 425 MnT.
The country’s 2017 actual coal output was still below the government’s target of 477 MnT as some companies couldn’t meet their production target due to various reasons, including permits issues, unable to secure heavy equipment, or weather, he said.
In 2018, the country’s domestic consumers, including power plants, textile makers and fertilizer producers, are expected to burn 114 MnT of coal, leaving the remaining 371 MnT for exports. Last year, Indonesia’s domestic consumption reached 97 MnT, rising from 90.5 MnT in 2016.
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