Local coal demand may hit 50m tons by 2002

NUSA DUA, Bali (JP): Indonesian demand for coal is projected to increase drastically to 50 million tons in 2002 from 11 million tons last year.

Vice president of the Indonesian Coal Mining Association, Graeme Robertson, said here last week that by 2002, a coal-fired power generating capacity of more than 7,000 megawatts would have been installed in Indonesia.

This capacity alone will require over 20 million tons of coal per annum, Robertson said.

Cement, paper and pulp plants will also increase their coal consumption to about eight million tons in 2002, he added.

"Domestic coal briquetting is another sector undergoing expansion to meet growing industrial and household use," Robertson said at the 24th Australia-Indonesia business conference here.

Robertson is chairman of the Swabara Group in Indonesia and managing director of New Hope Corporation in Australia. Their combined interests produced some 12.5 million tons of thermal coal last year, mainly from the Adaro and Multi Harapan mines in Kalimantan.

Robertson said the increasing use of coal in power generation in Indonesia and several other Asian countries would drive up coal demand in the region.

Coal imports for power generation by six leading Asian countries -- China, India, Japan, the Philippines, Taiwan and Thailand -- are projected to reach 25.4 million tons per annum by 1999 and 63 million tons by 2002.

Robertson, however, warned that the growth in coal supply would be very unlikely to offset a more rapid increase in demand, and this imbalance would tighten the market starting in 1999.

Indonesian Coal production increased drastically since 1981, when the government opened the sector to foreign investments.

Coal production rose from 27.8 million tons in 1993 to 32.9 million tons in 1994, 42 million tons in 1995 and 51 million tons in 1996.

Most of Indonesia's coal output was exported to Asian and European countries as well as the United States.

Indonesia, which exported 36.4 million tons of coal last year, up from 31.3 million tons in 1995, is currently the world's third-largest exporter of thermal coal.

Robertson projected that Indonesia's coal output would increase to 85.7 million tons by 1999 and 114 million tons by 2002.

According to data at the Ministry of Mines and Energy, Indonesia holds 36 billion tons of proven coal reserves, as compared to proven oil reserves of 10.92 billion barrels.

Most ( 74 percent) of the country's coal output now is derived from 10 foreign mining contractors of the first generation. The contractors operate under production-sharing contracts with state-owned PT Tambang Batubara Bukit Asam.

Eighteen other coal mining contractors, which are mostly Indonesian companies, are still in exploration stages or preparing construction production facilities.

Six of these are scheduled to start production within two years. (rid)