Indonesia allows more producers to export coal

Indonesia has further eased a ban on coal exports for January, allowing more coal miners to sell their product overseas.

As many as 32 coal producers have been permitted to export coal, the country's energy ministry (ESDM) said today. These producers have agreed to fully meet the domestic market obligation (DMO) norms for the last year and pay a penalty for the failure to comply with the regulation, the ESDM said. 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. The ESDM is evaluating 2021 sales of over hundreds of more miners.

The latest decision follows last week's move to permit 139 coal producers, which fully met the DMO norms for last year, to export coal. The decision could increase supplies in the seaborne coal market in coming weeks. But uncertainties surrounding Indonesia coal's price outlook may continue until a final decision is taken.

Argus last assessed Indonesian GAR 4,200 kcal/kg (NAR 3,800 kcal/kg) coal on 21 January at $60.66/t fob Kalimantan. The prices hit 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 export ban will remain in place for coal producers other than those which received export permissions, the ESDM said. It did not give an estimate of the total volume of coal that would be available to the seaborne market with the partially lifting of the ban. 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