Coal news and updates

Indonesia on track to limit coal output

The government has announced that it will proceed with plans to cap the production of coal next year, a move aimed not only at protecting the environment but also at helping to stem a decline in global coal prices.

Amid projections that coal prices would remain low next year, the government expressed optimism that it could limit annual coal production to around 400 million tons once the policy takes effect next year.

“It [the quota] will not exceed 400 [million tons]. But they [companies] are still allowed to export,” the Energy and Mineral Resources Ministry’s minerals and coal director general, R. Sukhyar, told The Jakarta Post recently.

“Companies only need to adjust their capacity and facilities [to comply with the policy]. I don’t think the policy will cause any problems,” he said.

The government projects that total coal production will reach 421 million tons this year, the same amount that was produced in 2013. Around 25 percent of coal produced services domestic demand, while the remaining 75 percent is exported abroad.

Indonesia is Asia’s biggest exporter of thermal coal for power plants.

Coal production remained strong in the last couple of years despite a decline in global coal prices of US$73 per ton this year and $82 per ton last year, according to the Energy and Mineral Resources Ministry. The price for coal peaked in 2010 at over $100 per ton.

Source: Jakarta Post