Indonesia coal miners may struggle to meet 2022 output target

Tanjung Bara coal terminal in Indonesia. (Image by Consigliere Ivan, Wikimedia Commons).

Indonesian miners may struggle to reach a 2022 output target of 663 million tonnes because of export restrictions imposed unexpectedly in January, Indonesia Coal Miners Association executive director Hendra Sinadia said on Monday.

The world’s top thermal coal exporter shocked global energy markets at the start of the year with a decision to halt foreign shipments to shore up domestic supply for power stations.

Exports have since resumed but the government has put in place rules where miners’ domestic sales are monitored monthly and only those fulfilling local quotas are then allowed to export.

Meanwhile, coal demand and prices are being pushed higher as Russia’s invasion of Ukraine sends oil prices soaring, leading buyers to seek alternative fuel supplies from Indonesia and Australia, Hendra said during an interview on local television network IDX Channel.

“We heard there are some buyers, even embassies of European countries who try to facilitate (exports talks) with companies in Indonesia,” he said, adding that miners may not be prepared to meet this additional demand.

Indonesia’s 2022 output target, up from last year’s 614 million tonnes, was “too optimistic” to begin with, Hendra said.

Data from the energy ministry showed that output in January and February this year was estimated at 74.41 million tonnes, compared with 92.79 million tonnes in the same months last year.

He added that weather concerns were another potential limitation on production after the country’s meteorology agency warned that Indonesia may experience moderate wet weather driven by the La Niña phenomenon in the first half of this year.

(By Bernadette Christina Munthe and Fransiska Nangoy; Editing by Ed Davies and Kanupriya Kapoor)

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