Coal producers in the world's top exporter of thermal coal had urged the government to delay the rule as they said it could dampen interest in mining investments.
The energy and minerals ministry has been drafting a regulation that would by 2014 require coal producers to upgrade low-quality coal to a medium-quality coal before exporting. The coal would need a minimum heating value of 5,600 kcal/kg on a air-dried basis.
"There are some pilot projects but so far there is no proven upgrading technology," said Bambang Setiawan, director general of minerals and coal at the energy and minerals ministry.
"We can't tell them to upgrade if there's no technology available. We will see if the technology will be available in the next 3-4 years," said Setiawan.
The planned regulation was part of a mining and coal law introduced in 2009 that requires miners to process coal and minerals into higher value products before exporting them, as the country seeks to boost revenue from the mining sector.
The Indonesian Coal Mining Association has said Indonesia's mineable reserves of low-quality coal may reach 10 billion tonnes, or half of current total reserves of around 21 million tonnes, within the next 2-3 years, as more firms are expected to start producing coal with a heating value of 3,000-3,400 kcal/kg.
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