Coal production falls amid weak global market

Coal production by the country?s coal miners holding the coal contract of work (PKP2B) in the first four months of this year fell by 10.48 percent compared to the same period of last year amid lingering weak global coal market.

According to data from the Ministry of Energy and Mineral Resources (MEMR), coal output by the PKP2B miners, which account for about 80 percent of the country?s coal production, in January-April period of this year totaled 86.63 million tons, compared to 97.66 million tons in the corresponding period of last year.

Meanwhile, export by the PKP2B coal miners in the same period declined by 14.29 percent to 68.09 million tons year-on-year, MEMR Spokesman Sujatmiko said over the weekend.

Meanwhile, domestic coal demand has continued to increase since last year. Domestic market obligation (or DMO) of the PKP2B coal miners in the January-April period of this year increased by 34.54 percent to 24.54 million tons from 18.24 million tons in the same period of last year.

Regarding output by the IUP mining business permit coal miners, Sujatmiko said that the ministry is still in the process of coordinating the data with the regional governments.

Director of the Indonesia Coal Mining Association (ICMA) Hendra Sinadia said that there is still opportunity for the export market to increase this year including from India and China. He added that domestic demand for coal is expected to further increase over the next few years as new coal-fired power plants begin operation starting 2018. According to ICMA, domestic coal demand is projected to jump to 177.5 million tons in 2020 as a combined 20,000 MW coal-fired power plants are targeted to be completed by 2019. (*)