Indonesia eases coal export ban

Indonesia has eased a ban on coal exports for January, allowing a number of coal miners to sell the product overseas.

As many as 139 coal producers which fully met the domestic market obligation (DMO) norms for the last year have been permitted to export coal, the country's energy ministry (ESDM) said today. Under the DMO, suppliers have to dispatch at least 25pc of their output to the domestic market.

The permission accorded to these producers is the result of an ongoing evaluation on the fulfilment of DMO rules by Indonesian miners over the last year. This means that more producers could be allowed to export in coming days as the evaluation continues, potentially raising supplies in the seaborne coal market in coming weeks.

But until a final decision is taken, uncertainties surrounding Indonesia coal's price outlook may continue. Argus assessed Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) coal at a historical high of $154.21/t fob Kalimantan on 22 October 2021, from a historical low of $22.40/t on 11 September 2020. The market was last assessed on 14 January at $58.97/t fob Kalimantan.

The export ban will remain in place for coal producers other than those which received export permissions today, the ESDM said. It did not give an estimate of the total volume of coal that would be available to the seaborne market after today's move to partially lift the ban.

The ministry said the decision was taken after coal supplies and inventories at domestic utilities rose. The ban on exports for January was put in place because of acute coal shortages at domestic utilities primarily operated by state-controlled utility PLN, which fuelled fears of widespread blackouts that could cripple economic activity.

By Saurabh Chaturvedi