Indonesia delays the submission of Work Plan and Budget for coal producers to be submitted after the first quarter of this year - Photo: Special

JAKARTA (TheInsiderStories) – Indonesia delays the submission of Work Plan and Budget for coal producers to be submitted after the first quarter of this year. This plan is regulated in Regulation of the Minister of Energy and Mineral Resources Number 7 of 2020 concerning the procedures for granting territories, permits and reporting on mining and mineral mining business activities.

The government also considering to changes the coal production quota in 2020 to improve the price of coal in the first semester. This was conveyed by director general at the ministry, Bambang Gatot Ariyono at the parliament hearing last week.

Initially, the government targeting the quota target of 530 million tons (MT) of coal but now the production has exceeded the figure around 550 MT of coal. Now, the ministry raised the quota and give the spaces of another 60 MT of coal tons or 12 percent to match the realization of 2019 production of 610 MT of coal.

Executive Director of the Coal Mining Association Hendra Sinadia believes the plan to increase the coal production quota in the middle of this year will be difficult to realize. The reason is that the company’ production planning has been prepared by considering a number of factors namely the market outlook, mining plans, availability of production equipment, and suitability of the investment plan.

“Realization of coal production this year is increasingly difficult to predict because of market movement factors and coal prices are increasingly complicated because of the coronavirus outbreak,” he noted.

In March, the EMR ministry set the reference price of coal US$67.08 per MT of coal. The price higher 0.28 percent compared to February’ price at $66.89 a MT and in January was $65.93 per MT.

The analysts believes the increase in March due to high competition in the domestic market for steam power plants and the overseas needs. But they rated, the situation will return to normal in the third quarter of 2020.

Based on EMR ministry data, until end of February, the realization of coal exports from Indonesia recorded 29.82 MT of coal or only 7.55 percent of this year’ plan with total amount 395 MT. The realization of coal production reached 94.34 MT or 17.15 percent of this year’ planned production which reached 550 MT of coal.

The average HBA in 2019 reached US $ 77.92 per ton, lower than the average HBA in 2018 which reached US $ 98.96 million tons. Then the average HBA in 2017 reached US $ 85.91 per metric ton. In 2016, the average HBA reached US $ 61.83 per ton.EMR ministry has urged the coal producer to prioritize the fulfillment of domestic primary energy needs to support the government’ renewable program. Until October of 2019,  the realization of domestic coal utilization was only 95 MT from the target 128 MT.

This year, the EMR minister, Arifin Tasrif, decided to continue the Domestic Market Obligation of at least 25 percent of the coal production in 2020. These provisions are contained in Ministerial Decree Number 261 of 2019 concerning Fulfillment of Domestic Coal Needs for 2020.

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