Indonesia approves more permits to ease coal, metals ship delays

Fri Feb 18, 2011 9:43am GMT
* Govt approves export permits for another 29 firms
* Backlog on coal shipments remains
* Some traders borrowing permits to ship coal (Adds trader quotes, details)
By Fitri Wulandari

JAKARTA, Feb 18 (Reuters) - Indonesia has approved permits for 29 more firms to resume coal and metals exports, paving the way for traders and producers to begin clearing a backlog of shipments at the country's ports, a trade ministry official said on Friday.

Up to 3.5 million tonnes of coal shipments, destined to fuel power stations in China and India, have been delayed in recent weeks because of changes to coal and mining laws that required cargoes to undergo extra surveys in a bid to stem tax evasion.

With the latest set of approvals, a total of 81 firms are now allowed to resume exports, after 52 companies were given approval earlier this month, said Junaedi, head of the mining exports unit at the ministry.

Indonesia's trade ministry ordered surveyors in January to temporarily halt issuing surveyor reports to coal and mineral traders in the process of reapplying for trading permits under the new coal and mining law.

"The energy ministry notified us that they have issued trading permits for (an additional) 29 mining firms," said Junaedi, who like many Indonesians only has one name.

As part of obtaining export permits, Indonesia has required exports of mining products including coal and tin to be checked by surveyors, as the country seeks to keep illegal mining in check and boost revenue from the sector.

Surveyor reports, required for shipping coal and metals, show the origin of the cargoes and are used to calculate royalties.

Despite the 81 permits that have been issued, a backlog of cargoes still remains, with some shippers still waiting for export permits from the energy ministry, traders and shipping sources said.

Some desperate traders have also borrowed export permits from other shippers who have already obtained them.

"Some traders have submitted requests for the permit two months ago and they haven't got it," a port source said.

"So instead of waiting for the permit to be issued, they just ship the coal under the name of another shipper that already has the permit," the source said.

But traders could not give details how many vessels are still being held up in ports around Indonesia, the world's top thermal coal exporter that is expected to produce 340 million tonnes of coal this year.

Previously, the Indonesian Coal Mining Association said around 60 to 70 vessels or 3.5 million tonnes of coal were backed up in Indonesian ports.

"There is a backlog and vessel waiting times are up to about 20 days, which is pretty high for Indonesia," a trade source in Singapore said.

"From what I hear, there are a couple of ways to get around it...you can just borrow a miner's license and pay him," the source said. (Additional reporting by Yayat Supriatna in JAKARTA, and Rebekah Kebede in PERTH; Editing by Neil Chatterjee, sourced:reuters)

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