Govt acknowledges coal downturn would cut reserves

By Adianto P. Simamora

The government acknowledged that the lingering downturn in coal price has not only led to financial losses suffered by the state, but would also lead to lower coal reserves in the country as miners have been discouraged from carrying out exploration activities to find new reserves.

According to Minister of Energy and Mineral Resources Sudirman Said, the non-tax state revenue from the mining sector was only Rp29.63 trillion in 2015, far lower from the target of 52.2 trillion mostly due to the fall in coal price.

?Other aspects that would suffer due to the drop of coal price is the decreasing of coal reserves, investment and profit,? the minister said in his speech red by the Director General of Mineral and Coal Bambang Gatot Ariyono at the CoalTrans Asia conference.

He did not elaborate.

Data from the Ministry?s Geological Agency of Indonesia said that the country has 126.6 billion tons of coal resources with 32.6 billion tons of coal reserve as of 2015.

The Indonesian Coal Mining Association (ICMA) and PwC Indonesia in a recent joint survey found that the country?s mineable coal reserves reached only about 7.3 billion to 8.3 billion tons which was calculated based on the current coal price. The ICMA?s figure is far lower than the Ministry?s data on reserves.

?The government would revise the regulation on coal price formulate to adjust with the drop of coal price,? the speech said.

Editing by Reiner Simanjuntak