Indonesian Coal Producers to Cut Reliance on China

BRISBANE, Australia - June 19, 2013 - PRLog -- Indonesia is expected to make greater efforts to develop markets in India and South Korea, in order to offset the impact from China’s proposed rules banning low-quality coal imports, Jero Wacik, the country’s Minister of Energy and Mineral Resources said at the Coaltrans Asia conference in Bali on June 2.

Meanwhile, Indonesia will boost local demand to increase the proportion of coal in its total energy consumption to 33% by 2025, up from 24.5% currently.

However, oil’s share will be reduced to 20% from 49.7%, according to plans.

It is suggested that the proposed ban in China has not had any negative effect yet, with local producers being told to maintain confidence.

Indonesia is expected to mine 391Mt this year, slightly up from 386Mt in 2012, according to forecasts.

China sourced 118.47Mt of coal from Indonesia last year, including 50.61Mt of brown coal, according to Chinese customs statistics.

Meanwhile, the companies working to develop Australia’s next major thermal coal province view the proposed Chinese ban on the import of low quality coals as a potential game changer for the development of Queensland’s Galilee Basin.

While there remains considerable uncertainty about the ban and its date of implementation, producers around the world are eyeing a possible opportunity if, as expected, substantial volumes of low quality Indonesian coal is displaced.

This article first appeared in McCloskey China Coal Report. The latest information on the Chinese coal industry can be found in the McCloskey China Coal Report which presents monthly updates on both the producer and consumer sides of the Chinese coal market.  To compliment the monthly report, daily updates are also available via McCloskey China Coal Report Daily. Further information was supplied by Inside Coal, a daily publication offering an overview of the major events impacting the international coal industry.

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