Domestic coal demand to increase by 20 million tons next year

Domestic coal demand is projected to increase by about 20 million tons next year to 170 million tons from about 150 tons this year thanks to the operation of new large-scale coal-fired power plants, Tanjung Jati B and Cilacap during the year, Bisnis Indonesia reported on Thursday.

The chairman of the Indonesian Coal Society (ICS), Singgih Widagdo, said in Jakarta on Wednesday that the operation of the new steam power plants would not only raise the coal demand at home but also would raise competition among the country’s coal mining companies.

Singgih said that although there would be a significant increase in the demand from local buyers, most coal producers would still export larger part of their coal production. “Although the price of coal is projected to decline to about US$40 per ton next year, the export market remains promising,” he said.

According to him, the average production cost of the country’s mining companies reach between US$22 and US$25 per ton. It means that the export market remains attractive even if the coal price drops to U$35 per ton. (*)