Indonesia gets extra coal supplies ahead of a review of the export ban

[ASEAN NOW Content Team]

 

On Tuesday, Indonesia's national utility obtained an additional 7.5 million tonnes of coal supply, averting power shortages, boosting reserves, and increasing the odds that the government will soon abolish its export prohibition.

To minimise disruptions at domestic generators, Indonesia, the world's top producer of coal used in power plants and China's main overseas supply, put a moratorium on exports throughout January on Saturday.

 

China's coal prices have risen as a result of the action, while Indonesian authorities are expected to review the restriction on Wednesday.

While the additional supply had been acquired, state utility Perusahaan Listrik Negara (PLN) stated it planned to continue raising inventories to a minimum usage level of 20 days.

 

"Coal power plants that have been in a supply crisis are beginning to see their supply issues resolved," PLN CEO Darmawan Prasodjo said in a statement.

A PLN spokeswoman was unable to say how much extra supply was required for the planned stock level.
PLN has earlier stated that it would require an additional 5.1 million tonnes of supply in January to avert extensive disruptions.

 

As a "very short-term solution," Pandu Sjahrir, chairman of the Indonesian Coal Miners Association (ICMA), stated the group's ten largest members will assist PLN in closing the supply deficit.

According to Rory Simington, lead analyst for Asia Pacific coal research at Wood Mackenzie, such coordination could prevent a month-long suspension.

"A halt in Indonesian exports would have a significant impact on thermal coal markets," Simington said, "but a total embargo for January is unnecessary and unlikely to be executed."

 

"We predict 40 million tonnes of Indonesian exports in January, with total domestic demand of around 12 million tonnes; any deficit would only require a fraction of total capacity," he added.

In a statement released on Tuesday, ICMA said it was in talks with the government to fix the issue and was working with members to meet domestic requirements.

"We are hopeful that the supply shortages in some power facilities will be resolved soon, and that exports will gradually reopen," it stated.

 

Distribution was hampered, according to the group, by challenges in getting vessels to transfer coal to the public utility.

"The primary roadblock in the field to accelerating supplies distribution is the lack of barges," it stated.