JAKARTA (TheInsiderStories) – The ministry of energy and mineral resources (EMR) increased the national coal output targets from 550 million tones (MT) of coal to 625 MT of coal, its announced on Monday (04/13). The impact of the COVID-19 pandemic on the mining sector was the reasoned by the government to increase the coal production in 2021 for overseas sales purposes.
“The additional coal production is not subject to a percentage of coal sales for domestic market obligation (DMO),” wrote the ministerial decree stipulated by the minister, Arifin Tasrif, on April 6, by adding of the total production, 137.5 MT of coal will be allocates for DMO.
The ministry data showed, until April 13, the realization of the domestic coal production was recorded 151.28 MT of coal, the realization of DMO at 19.5 MT of coals, and exports reached 73.46 MT of coal.
In 2020, Indonesian coal exports recorded 305.77 MT of coal or only 77.4 percent of the targets at 395 MT of coal. When compared to 2019, total exports fell by 32.7 percent from 454.50 MT of coal.The contraction was the first time since 2015.
The declining because of the low demands, especially from China and India. However, the coal production recorded at 557.54 MT of coal or higher than the government’ targets around 550 MT of coal. But the amount lower than 2019 at 616.2 MT of coal.
In December only, the world’ largest thermal coal exporter, shipped about 41 MT of coal, up by 8.89 percent from a year ago and the highest since October 2019. At the same month, shipments to China stood at 17.55 MT of coal or up by 70.55 percent on the year and likely an all-time high.
For the whole year, total exports of Indonesian to China dropped by about 18.62 percent from the previous year to 127.4 MT of coal. The surge in Chinese demand for Indonesian coal amid a ban on imports from Australia.
Last year, China announced to lift its import quota for thermal coal by 20 MT of coal until the end of the year. The world second largest economy has import 300 MT of coking and thermal coal from various countries during 2020.
Some analysts rated, Indonesia and Russia are likely to get benefits from the increased quota. The countries are the three biggest suppliers of seaborne thermal coal to China, while Australia and Mongolia dominate exports of coking coal, which is used in steel furnaces.
While, combined exports to Japan, South Korea, Taiwan, India and Southeast Asia fell by a total of 3.8 MT of coal on the year. 10.53 Then, total exports to India fell by around 13.29 percent in annual basis to 9.13 MT of coal in December 2020, due to increasingly competitive prices for Australian coal because of the ban in China.
Currently, both countries held a discussions on coal trade after experienced fallen export by nearly 50 percent in 2020. Sujatmiko, a director at EMR ministry office, said the amount equal to 70 percent of last year’ exports level.
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