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Indonesian miners to

cut production

INDONESIA INDONESIA’S mining companies have agreed would produce 550mn tonnes of coal this year.
to cut coal production by 50mn in 2021 in a bid 42% of the target had been met as of May.
to prop up coal prices that have fallen during the “If we compare the numbers, it feels like the
coronavirus (COVID-19) crisis. 550 [million tonnes] target can be met,” Energy
The Indonesian Coal Mining Association Ministry Coal Director Sujatmiko said a day
(APBI) said this week its members would cut before the APBI’s announcement.
output from the previous 2020 target of 530mn The government and coal miners were focus-
tonnes to 480mn tonnes because of weak prices, ing on redirecting sales into South Asian and
the Jakarta Post reported. Southeast Asian markets to make up for lost sales
Indonesia’s benchmark coal price (HBA) in China and India, he added, during a webinar
hit a four-year low of $52.98 per tonne in June, hosted by green energy non-profit CERAH.
according to Energy and Mineral Resources “Expecting these countries to fill in the short-
Ministry data. age to China is, of course, not a short-term or
“The [low price] trend will continue amid long-term plan. We cannot even expect much
concerns over a possible second wave of from 2020. But these are new markets we can
COVID-19,” wrote APBI chairman Pandu secure,” said APBI executive director Hendra
Sjahrir in a statement on Wednesday. Sinadia at the webinar.
A possible second wave is expected to reduce A recent report calculated that only six out of
coal demand in major coal exporting markets 11 big coal companies in Indonesia can remain
such as China, Japan, India and South Korea. profitable, given that coal prices have lingered at
Coal makes up 14% of Indonesian exports, around $50 per tonne in 2020.
Statistics Indonesia (BPS) data show. Exports The unprofitable or “cash flow negative” com-
cooled 28.95% year on year in May to $10.53bn, panies are PT Bumi Resources, PT ABM Inves-
their lowest level since July 2016, partially owing tama, PT Bukit Asam, PT Toba Bara Sejahtra and
to falling coal exports. PT Harum Energy and Geo Energy Resources
“This will of course have an impact on gov- Ltd, according to the report by the Institute
ernment revenue and national production tar- for Energy Economics and Finance Analysis
gets,” the association stated. (IEEFA).
However, the APBI’s disappointing forecast However, PT Bumi Resources, Indonesia’s
contrasts with the government, which is more most productive coal miner, is not planning to
confident of output meeting the expected 550mn cut production levels, said Bumi corporate sec-
tonnes in 2020. retary Dileep Srivastava.
The energy ministry expects to earn He noted the company could produce
IDR35.93 trillion ($2.5bn) in non-tax state rev- between 88mn and 95mn tonnes of coal this
enue (PNBP) from coal and mineral miners this year.
year, 41% of which had been achieved as of early “Our production and sales are on track at
June. The mining sector is a major contributor to normal levels presently, in spite of the present
state coffers in Indonesia. challenges,” he said.™
The revenue target assumes that Indonesia

P6 www. NEWSBASE .com Week 27 08•July•2020