For the ongoing year of CY20, the government of Indonesia has made an upward revision of the projected coal demand from the country’s mineral processing and smelting industry to 23.9 mn t from the initial target of 16.5 mn t.
The higher coal demand projection from the smelter sector comes from the recent commissioning of a nickel smelter at the Indonesian Weda Industrial Park (IWIP) in Weda, Central Halmahera Regency, as mentioned by Muhammad Wafid, director of Mineral and Coal Development Program at the Ministry of Energy and Mineral Resources.
IWIP had announced the commissioning of Weda Bay Nickel project’s first RKEF line smelter on April 30, 2020, with the expected annual production of 30,000 t.
The company said IWIP is the first integrated industrial area in Indonesia to facilitate mineral smelting and production of electric vehicle’s battery component.
The smelter sector is one key the domestic coal consumers. Under the government’s coal domestic market obligation (DMO) policy, coal miners in the country are required to allocate at least 25% of their output to the domestic market.
Indonesia’s revision in its DMO target
The country’s coal production by 30 Jun’20 has touched 254 mn t while the full year’s target is 550 mn t,
“Realization of coal production until June is 46% of the planned output for 2020, while the achievement of the DMO amounts to 35.7% of the 2020 plan,” spokesperson at the ministry Agung Pribadi said.
He said that the country’s coal production has not yet been affected by Covid-19, but the realization of DMO (as of June 2020) has decreased due to the pandemic.
The government of Indonesia has made a downward revision of its DMO volume target for this year due to lower domestic coal consumption.
The new coal DMO volume projection for this year is now set at 140.8 mn t, down from the initial target of 155 mn t. Last year, realized DMO volume was 138.41 mn t.
DMO Plan in 2020
| No. | End user | Before Covid-19 | After Covid-19 |
| 1. | PLN | 108.9 | 87.6 |
| 2. | Processing and Smelting industry | 16.5 | 23.9 |
| 3. | Fertilizer industry | 1.7 | 1.4 |
| 4. | Cement industry | 14.5 | 12.7 |
| 5. | Textile industry | 6.5 | 6.5 |
| 6. | Paper industry | 6.6 | 7.4 |
| 7. | Briquette industry | 0.01 | 0.004 |
| 8. | Ceramic industry | 0 | 0.2 |
| 9. | Petrochemical industry | 0 | 0.007 |
| 10. | Alkaline chlorine industry | 0 | 0.94 |
| Total | 155.0 | 140.9 |
Qty in mn t
Indonesia’s coal export
Government of Indonesia targets to export 441 mn t (80%) this year out of the country’s projected production of 550 MnT.
The country’s coal export declined by 10% y-o-y during Jan-May and stood at 175 mn t amid COVID-led sluggish demand from China and India, the main export markets for Indonesian, Ministry’s data reveals. Export realization for the above period was worth USD 7.7 billion.
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