Domestic coal demand to increase by between 5% to 7% in 2006

The government has estimated that the domestic coal demand will increase slightly by between five and seven percent in 2006 despite the government's campaign to increase the use of coal for industries, Investor Daily reported on Monday.

Director General of Coal and Geothermal at the Ministry of Energy and Mineral Resources Simon F.Sembiring, said in Jakarta recently that the coal demand from local buyers was estimated to increase by between five and seven percent from about 35 million tons this year.

He said that the projection of the domestic coal demand was based on the estimate made prior to the launch of the government's campaign on the increase in the use of coal for industrial activities recently.

The chairman of the association of coal miners (APBJI), Jeffry Mulyono has predicted that the coal demand from local buyers would increase by more than five fold in 2025 to about 194 million tons due to increase in the use of coal for industrial activities

"The domestic coal demand is expected to increase by 3.4 tons a year as the impact of the government's new energy policy," he said, the new energy policy would also result in the increase in the country's coal production by 14.1 tons a year. With this assumption, the total coal production will reach about 300 million tons in 2005 as compared to about 131.53 million tons.

The government has called local industries to increase the use of coal and gas in a bid to reduce the use of oil which has caused sharp increase in the government's fuel subsidy. However, analysts have said the lack of transportation facilities would impede the energy shifting program.

At present, 70 percent of the country's coal production are exported and the other 30 percent are shipped to local industries mostly power plants. (*)