Ministry mulls policy to limit coal production

The Ministry of Energy and Mineral Resources is considering to issue a new policy limiting coal production in producing provinces amid concerns that the country?s annual coal output has repeatedly exceeded target.

Bisnis Indonesia quoted ministry Spokesman Sujatmiko as saying Monday that the ministry plans to coordinate with provincial administrations to help ensure that coal production in each provinces falls in line with the country?s annual production target set by the central government.

He said that as authority over IUP coal mining business permits has been transferred to the provincial administration from regency and mayoralty administrations, coordination will be easier to make.

The ministry has recently said that the country?s coal production this year is projected to reach 470 million tons, higher than the 413 million tons set under the National Medium Term Development Plan. About 80 percent of the country?s coal output is produced by large miners holding the coal contracts of work (or PKP2B), while the remainders by the IUP miners.

There are concerns that realized coal output this year will also exceed 470 million tons as many IUP miners are set to enter production stage this year, Director General of Mineral and Coal Bambang Gatot Ariyono said recently.

As has been previously reported, the government also plans to tighten its coal export policy starting in 2019 to preserve supplies for domestic power generation amid the ever-growing demand for coal in Southeast Asia.

Due to a lack of new coal discoveries, the government is looking to limit coal production to 400 million tons a year in 2019 from 419 million tons last year, The Jakarta Post reported.

As of last year, Indonesia, the world?s top thermal coal exporter, had coal resources amounting to 128.06 billion tons and coal reserves of 28.46 billion tons, located mostly in Kalimantan and Sumatra.

The paper quoted Sri Raharjo, the Energy and Mineral Resources Ministry?s Coal and Mineral Program Director, as saying that the resources and reserves were actually enough to meet the national demand for the next 70 to 80 years.

However, as there has been no new discovery lately, the government has decided to prioritize them for domestic use. (*)