Page 6 - AsiaElec Week 01 2021

AsiaElec COAL AsiaElec

Indonesia slaps ban

on coal exports

INDONESIA THE country’s Ministry of Energy and Mineral declarations from coal producers “because
Resources said in a statement on January 1 that they cannot deliver coal to buyers who have
coal exports would be banned for January “to contracts.”
ensure the fulfilment of coal supply” to domestic A planned meeting between mining compa-
power plants. nies and the Trade Ministry set for January 5 was
“If the export ban is not implemented, nearly postponed.
20 steam power plants with a power of around Indonesia is a major coal exporter, and was
10,850 MW will be extinguished,” Ridwan the world’s largest exporter of coal by weight
Jamaludin, director-general of minerals and coal in 2020, according to the International Energy
at the ministry, said in the statement. Agency (IEA).
“This has the potential to disrupt the stability Japan’s embassy in Jakarta on January 5 urged
of the national economy.” He added that once the energy ministry to lift the export ban for high
the power plants have secured supplies, things caloric coal, which is not used by local genera-
will normalise and coal will again be available tors, Reuters reported.
for export. “The sudden export ban has a serious impact
Meanwhile, President Joko Widodo on Japan’s economic activities as well as people’s
announced his support for the ban, ending any daily life,” the embassy said in a letter, adding at
hopes that it could be short-lived. least five vessels already loaded should be given
“Coal producers must prioritise local needs, immediate departure permits.
especially for power plant supply to [state-owned Japan imports about 2mn tonnes of coal per
utility company] PLN,” Widodo said in an online month from Indonesia, the embassy added.
address on Monday, January 3, referring to Peru- The ban hit the share price of Indonesian pro-
sahaan Listrik Negara. “Violating companies ducers, with analysts warning the move could
may be sanctioned. Not only [would they] not damage miners’ earnings this year.
to be able to obtain export permits, also [there On January 4, shares in Bumi Resources were
is the] possibility of their business permits being trading some 1.5% below their closing price of
revoked,” he said, adding that liquefied natural 2021, while another miner, Bukit Asam, traded
gas (LNG) producers must also prioritise local 1.8% lower, the Nikkei reported.
needs. Adaro Energy shares have so far this year
The country’s coal industry was taken by sur- risen versus their 2021 closing price, but in early
prise by the decision. Tuesday trading they were some 3% lower than
The Indonesian Coal Mining Association the previous day’s close.
said in a statement on Saturday that people in the Asia’s economic powerhouses China, India,
industry were “surprised” by the policy, which it Japan and South Korea together received 73% of
said was decided “hastily and without discussion Indonesian coal exports in 2021, ship-tracking
with business actors.” data from Kpler showed, Reuters reported.
The association called on the ministry to China’s benchmark thermal coal futures rose
revoke the ban, warning that the government as much as 7.8% on January 4 in the first day of
could lose valuable tax and nontax revenues, as trading since the ban was announced, before
well as there being a possibility of force majeure paring gains on January 5.™

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