Steel industry requires 5 million tons of coal by 2016
Monday, September 23 2013 - 09:42 AM WIB
Domestic steel industry needs about 3 million tons of coking coal and 2 million tons of non-coking coal by 2016 for steelmaking process. Indonesia's steel demand is expected to increase along with relatively Indonesian high economic growth, according to Chief Engineer Energy & Resources Development of PT Krakatau Steel Tbk (KRAS) Iskandar Muda.
Steelmakers, as mandated by Law No 4/2009 on Minerals and Coal, are urged to maximize the utilization of local potentials, including coal resources and raw materials (iron ore).
"The key issues for steel industry development are price and availability of energy (natural gas and electricity), dependency on imported raw material and the threat of steel import, especially from China," Iskandar said on 3rd Annual Business Meeting of Coal Producers and Buyers in Legian, Bali.
Amid the increasing price of natural gas and electricity, steelmakers hope the utilization of coal, which is cheaper than natural gas, in steelmaking processes may boost Indonesian steel competitiveness. Natural gas price on April 2013 was US$7.56 per mmbtu. Electricity tariff also slightly increased since the government reduced the fuel subsidy.
Director of Coal Business Development at the Ministry of Energy and Mineral Resources Edi Prasodjo, in the same occasion, welcomed the demand of coal from domestic steelmakers and urged the coal miners to provide required coal supply from the steelmakers.
Editing by Johannes Simbolon