RI?s coal freight cost $5/ton lower than Australia: Credit Suisse

By Adianto P. Simamora

Indonesia would remain a major supplier of thermal coal to Asia markets thanks to its shorter average freight distance compared to any other Australian and non-Asian producers, Credit Suisse, a leading global financial service company, has said.

Head of Mining and Energy for South East Asia of the Credit Suisse (Singapore) Limited, Alberto Migliucci said that freight cost differential between Indonesian and Australian coal producers is approximately $5/ton.

?Indonesia is attractive (thermal coal) supplier given low ocean freight cost into Asia (market),? he said.

He added Indonesia has natural advantage compared to other coal-rich nations as its exportable coal reserves are mostly located along the coast of Kalimantan.

?This allows for direct shipment without the need for costly inland railway facilities. Most operations also utilize their own coal logistic chain without needing to rely on third party infrastructure,? he said.

He said that Indonesia exported some 257 million tons of thermal coal compared to 154 million tons by Australia to India, China, Korea and Japan markets in 2010.

Editing by David Mustakim