AsiaDry Cargo

Jakarta meets with miners over coal export ban

The Indonesian government is meeting with the nation’s top miners today with a deal to ease this month’s coal ban expected to be announced shortly.

Indonesia shocked energy buyers and the dry bulk shipping community over the weekend by announcing a sudden ban of coal exports for the month of January over concerns about local power blackouts amid tight supplies. The swiftness of the announcement has left many ships bound for Indonesia in limbo.

Under Indonesia’s Domestic Market Obligation (DMO) scheme, miners are obliged to supply 25% of their output to the local market, but critically low stockpiles at power utilities have incited further action from the country’s energy ministry.

However, after much representation to government by the mining industry as well as overseas buyers this week, a deal to ease the ban is likely to be revealed later today.

Indonesia is the world’s biggest exporter of thermal coal, exporting around 400m tonnes in 2020. In 2021, Indonesia accounted for a third of total seaborne coal volumes, according to data from Braemar ACM. It also accounted for 65% of China’s imports specifically, up from 51% in 2019 due to China’s ban on Australian volumes.

Indonesia’s coal reserves have already been rapidly boosted in the opening days of the year as miners rushed to quell government fears over shortages with data showing as of yesterday the nation’s top utility had secured an extra coal supply contract of 7.5m tonnes.

The severity of the ban has been brought into question. As many as 25 coal companies in Indonesia’s key producing region East Kalimantan have been allowed to export coal in the opening days of the new year, local media quoted the provincial government as saying yesterday.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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