Indonesia prohibited coal exports in January due to domestic power issues

Due to worries that insufficient supplies at domestic power plants could lead to widespread blackouts, Indonesia halted coal exports in January, a senior official at the energy ministry said on Saturday (Jan 1).

The country will export roughly 400 million tonnes of thermal coal in 2020, making it the world's largest exporter.
China, India, Japan, and South Korea are its top customers.

Coal miners in Indonesia are required to supply 25% of annual production to state utility Perusahaan Listrik Negara (PLN) at a maximum price of US$70 per tonne, significantly below current market pricing, under the so-called Domestic Market Obligation (DMO) regulation.

"Why is it that everyone is prohibited from exporting?
It's beyond our control and only exists for a short time.
Almost 20 power plants with a combined capacity of 10,850 megawatts will be shut down if the prohibition is not enforced "The energy ministry's director-general of mines and coal, Ridwan Jamaludin, said in a statement.

"A widespread blackout could occur if strategic actions are not taken."

According to Ridwan, monthly coal shipments to power plants were below the DMO, resulting in a "coal stockpile shortfall" towards the end of the year, and the prohibition will be reviewed after January 5.

In a statement, the Indonesian Coal Mining Association (ICMA) urged the energy minister to lift the export prohibition, claiming that the policy was "made hurriedly without consultation with corporate stakeholders."

According to ICMA chairman Pandu Sjahrir, the widespread export prohibition might affect monthly coal production volumes of about 38 million to 40 million tonnes.
Indonesia has exported roughly 30 million tonnes of coal in January in recent years.

The group expressed concern about potential buyer disputes if coal producers declared force majeure because they were unable to supply coal shipments.

"Ships sailing into Indonesian waters would also face unclear conditions, which will harm Indonesia's credibility and trustworthiness as a world coal supplier," Sjahrir warned.