Update on coal reserves in Indonesia

Monday, 14 Nov 2011

The Jakarta Post reported that Indonesia's coal reserves with calorific values ranging from 3,000 to 3,800 kilocalories per kilogram amount to 10 billion tonnes. However, a domestic market for such coal does not yet exist.

The lowest calorific value currently used in the country is 4,200 kilocalories per kilogram. Coal with calorific values between 3,900 and 4,000 kilocalories per kilogram is mostly exported to India.

Data from the Energy and Mineral Resources Ministry shows that in 2011, the country's target is to produce 327 million tonnes of coal, comprising 35 million tonnes of low rank coal (3,800 kilocalories per kilogram to 4,500 kilocalories per kilogram); 198 million tonnes of medium rank coal (4,900 kilocalories per kilogram to 6,000 kilocalories per kilogram) and 94 million tonnes of high rank coal (5,700 kilocalories per kilogram to 6,000 kilocalories per kilogram).

In 2012, coal production is set for 332 million tonnes, comprising 29.3 million tonnes of low rank; 191.6 million tonnes of medium rank and 111.1 million tonnes of high rank.

In 2013, production is targeted at 337 million tonnes, comprising 29.7 million tonnes of low rank; 194.5 million tonnes of medium rank and 112.8 million tonnes of high rank.

Meanwhile, Bloomberg reported that Indonesia, the world's largest exporter of power station coal, cut the benchmark price for sales in November by 2.2%. The cost of coal with a gross energy value of 6,322 kilocalories was set at USD 116.65 per tonne as compared with USD 119.24 in October 2011.

(Sourced from www.thejakartapost.com)

Indonesia Blocks 3.5 Million Tons of Coal Shipments

February 1, 2011,
Bloomberg, By Bambang Djanuarto and Yoga Rusmana

Indonesia’s government has blocked shipments of at least 3.5 million metric tons of coal since Jan. 15, after a delay in issuing new trading permits, an industry group said.
About 70 vessels, each with a capacity of 50,000 tons, are stuck at ports because surveyors checking shipments won’t allow the exports before traders obtain fresh licenses from the Energy and Mineral Resources Ministry, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association.
“Some traders have declared force majeure because of the permit issue,” Kamandanu told reporters in Jakarta today, without identifying them. “More shipments will be halted as a lot more ships are entering the ports.”

Indonesia’s mining law of 2009 requires traders to convert old permits into new trading licenses issued by the Energy and Mineral Resources Ministry before they ship products overseas, said Djunaedi, head of mining exports at the Trade Ministry said Jan. 26. The ministry halted the process of giving out new licenses while waiting for the ministerial decree to be issued, Djunaedi, who uses one name, said at the time.
Alberth Yusuf Tobogu, export director of mining and industry products at the Trade Ministry, and Djunaedi didn’t answer two calls to their mobile phones seeking comment.
Force majeure is a legal clause that allows producers to miss deliveries because of circumstances beyond their control.
Indonesia, the world’s largest thermal coal exporter, has since 2008 required all exports of coal, metal ores and concentrate to be verified by government-appointed surveyors to prevent illegal shipments of commodities.

Indonesian investments in coal mining industry to exceed US$ 3 billion in 2011

Monday, 17 Jan 2011

The Energy & Mineral Resources Ministry said that it expected investments in the mineral and coal mining sector to reach USD 3.2 billion in 2011, a slight increase from USD 3.18 billion in 2010.
Mr Bambang Setiawan, the ministry's director general for minerals and coal, said that coal mining would remain the largest draw for investors sector due to soaring coal prices. He added that "Domestic players will dominate new investments in coal mining this year. With the surging prices, they will find it easier to secure bank loans to expand production."
The ministry's mineral and coal directorate general said the coal reference price for 6,322 calorie coal in January 2011 stood at USD 112 per tonne, jumping 8.6% from USD 103.41 per tonne in December. Analysts and coal business stakeholders predict the price would stay above USD 100 per tonne in 2011.
Mr Bambang said that the mineral mining sector would not be as bullish as coal mining. He predicted that there would be no significant increase in the amount of investment entering the sector. He added that "Many are interested in investing in the mineral mining sector but almost all potential mining sites have been acquired by existing miners."
Mr Bambang said that to attract more investors to the mineral and coal mining sectors, the government needed to combat the weak coordination between the government and regional administrations.
He said most regional administrations did not report to the Energy and Mineral Resources Ministry when they issued mining business permits. To deal with the problem, the ministry requires regional administrations to register all permits issued. He added that "Currently, around 10,000 mining business permits have been issued, but only 4,000 are registered by us."
In 2010, the ministry secured USD 3.18 billion in investments in the mineral and coal mining sectors, comprising USD 1.48 billion from mining contracts, USD 764 million from coal contracts of work, USD 38 million from state owned enterprises' mining concessions and USD 904.82 million from mining service businesses.
Mr Priyo Pribadi chairman of Indonesian Mining Association said that investments might grow but at a slower pace compared to last year. He added that "We face several constraints that may hinder the flow of investments to the mineral and coal mining sector."
He called on the government to crack down on regional administrations that did not report the issuance of mining business permits as such violations rendered it difficult for the government to map available mining sites for new investments.

Courtsey news by http://www.thejakartapost.com/