Indonesia 's coal markets are at risk
Tuesday, September 4 2012 - 04:59 AM WIB
Bart Lucarelli, President of Roleva Energy warned that Indonesia is now facing greater risk of losing competitiveness in a number of its coal export market areas.
Lucarelli explained at Kalimantan Coal Conference Tuesday in Balikpapan, East Kalimantan, that this condition is due to the increased willingness of competitors from Australia, USA, Republic of South Africa (RSA), Russia and even Colombia to offer higher quality coals at competitive C&F prices relative to Indonesian low CV high moisture coal (LRC).
The regulatory uncertainties created by the Ministry of Energy and Mineral Resources following the implementation of the Mining Law No 4 of 2009 have further undermined the competitiveness of the Indonesian coal, he added.
He said that Indonesia's main competitors are new coal suppliers located in the Galilee and Surat Basins in Queensland, which will ship their higher quality coals out of new coal terminals at Abbot Point and Gladstone to Japan , Korea and Taiwan .
The other competitors are PRB coal suppliers which will eventually be able to ship their higher quality coals from the West Coast of North America to Japan, Korea and China and also RSA coal suppliers which currently ship most of their higher quality coals into India and Asia.
Lucarelli predicted that with the growing shift to LRC, Indonesia will lose most of its transport cost advantage by 2015.
He added that only Chinese and Indian markets appear to be demanding significant volumes of Indonesian LRC and these two markets will largely dictate the future of Indonesian coal Industry.
Roleva Energy is a consultancy firm that conducts commercial & financial assessments of private power and fuel projects on behalf of private power producers, coal and gas suppliers, lenders and private equity investors.
Editing by Reiner Simanjuntak