The Indonesian Ministry of Energy and Mineral Resources (ESDM) has permitted coal miners to revise their Work Plan and Budget (RKAB) for this year if they want. This is because the ongoing corona virus pandemic has considerably impacted the coal demand such that the Indonesian thermal coal benchmark price (HBA) in April had to be reduced.
Director of engineering and environment of the directorate general of mineral and coal at the ministry, Sri Rahardjo, said that production could decline due to reduced demand. Export destination countries impose restrictions, the impact of which is a decline in sales.
“It could be if demand is reduced, for example their export destinations are limiting, sales automatically decrease and production can decline”, Rahardjo said at a press conference on Wednesday April 8.
Port Manager and Head of Mining Engineering of Indonesian coal mining PT Arutmin Indonesia Ahmad Juaeni said that so far the operations of the company are still running normally. The impact at this time has not been felt, but in the future if deemed necessary, a revised RKAB will be carried out.
He further explained some of the equipment that had just come on hold. He mentioned globally perhaps there was indeed an effect related to demand. However, he said that shipping activities were still running normally. “So indeed if there is no delay there is indeed more protocol”, he added.
As is known, the HBA in April dropped to the position of USD 65.77 per metric ton (MT) of the impact of the corona virus (Covid-19) which made affected countries reduce demand. Compared to March, this month’s HBA dropped USD 1.31/MT from USD 67.08/MT.
HBA in January 2020 was recorded at USD 65.93/MT, down from December 2019 at USD 66.30/MT. The HBA has fluctuated, rising in February at USD 66.89/MT and in March at USD 67.08/MT, and has again fallen this April 2020.
The drop in HBA so far has also not affected the production of coal major company PT Adaro Energy Tbk. Corporate Communication Adaro Febriati Nadira said that currently there has been no change in guidelines related to production or the same as before. The company will continue to carry out exploration activities as planned in the company’s mines and will continue to focus on efforts to improve operational excellence, control costs and efficiency, and execute strategies for business continuity.
“Arrangement of mining operations is carried out while prioritizing employee health without reducing productivity”, she said.
She further said, coal exports are currently still running according to schedule. “Every business unit has prepared a crisis management plan and we have taken the necessary precautions to ensure there are no disruptions”, she said.
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