RI coal production to increase to 119.7 million tons
RI coal production to increase to 119.7 million tons
Fitri Wulandari, The Jakarta Post, Jakarta
Coal production is expected to increase significantly this
year on the back of high demand from both the global and domestic
markets, the national coal association announced on Monday.
Jeffrey Mulyono, chairman of the Indonesian Coal Mining
Association (APBI) said according to Business Monitor
International, coal production in 2004 was estimated at around
119.7 million tons, up from 109.3 tons in 2003 and 103 million
tons in 2002.
"We are optimistic that demand for Indonesia's coal has good
prospects because of growing energy demand from industrial
countries such as China and the domestic market," Jeffrey said.
He said global demand for coal was still driven mainly by
energy-hungry China. Currently, 84 percent of that country's
electricity is generated by coal-fired power plants, and will
increase in proportion with the Chinese government's goals to
provide electricity for 700 million people.
Increased demand, Jeffrey said, was also expected from other
Asian countries such as Taiwan, South Korea, Japan and India.
Seventy percent of Indonesia's coal production goes toward
export.
Domestic demand for coal has been increasing gradually, and
the market consumes 25 to 35 percent of total production, said
Jeffrey.
"Many industries are now shifting to coal as a fuel source,
for example textile factories," he said.
The construction of small and large coal-fired power plants
also boosts domestic demand, he added.
Coal-fired Tanjung Jati B power plant, which is under
construction, requires 4.5 million tons of coal annually to
produce 1,300 Megawatts of power.
Jeffrey said the higher production volume would be met by
existing coal producers that planned to increase production. For
instance, second-largest coal producer PT Kaltim Prima Coal plans
to raise production up to 24 million tons from an average 18
million tons per year.
Additional production would also come from several new coal
mining companies, including PT Garda Tujuh Buana, PT Kalimantan
Energi Lestari, PT Marunda Graha Mineral and PT Mandiri Perkasa.
Top coal producers for this year are PT Adaro (22 million
tons), Kaltim Prima Coal (18 million tons), Arutmin (14.5 million
tons), Kideco (12 million tons), state-run coal mining PT Tambang
Batubara Bukit Asam (11 million tons) and Berau Coal (8 million
tons).
Aside from rising demand, coal producers also expected an
improvement in price.
Jeffrey said the price of coal averaged US$38.89 per ton for
high-quality coal, a jump from $24 in the second quarter of 2003.
He said the price would stabilize to around $30 per ton.
"The acceptable range for producers and buyers is between $30
and $32 per ton."
He added that the APBI expected to maintain the price at an
acceptable rate to give producers space to improve their existing
capacities.
Despite the bright outlook, Jeffrey said problems related to
fiscal policies and legal issues still persisted, hindering new
exploration.
Among the problems are value added tax, illegal coal mining
and Law No. 41/1999, which outlaws mining in protected forests.
Fitri Wulandari, The Jakarta Post, Jakarta
Coal production is expected to increase significantly this
year on the back of high demand from both the global and domestic
markets, the national coal association announced on Monday.
Jeffrey Mulyono, chairman of the Indonesian Coal Mining
Association (APBI) said according to Business Monitor
International, coal production in 2004 was estimated at around
119.7 million tons, up from 109.3 tons in 2003 and 103 million
tons in 2002.
"We are optimistic that demand for Indonesia's coal has good
prospects because of growing energy demand from industrial
countries such as China and the domestic market," Jeffrey said.
He said global demand for coal was still driven mainly by
energy-hungry China. Currently, 84 percent of that country's
electricity is generated by coal-fired power plants, and will
increase in proportion with the Chinese government's goals to
provide electricity for 700 million people.
Increased demand, Jeffrey said, was also expected from other
Asian countries such as Taiwan, South Korea, Japan and India.
Seventy percent of Indonesia's coal production goes toward
export.
Domestic demand for coal has been increasing gradually, and
the market consumes 25 to 35 percent of total production, said
Jeffrey.
"Many industries are now shifting to coal as a fuel source,
for example textile factories," he said.
The construction of small and large coal-fired power plants
also boosts domestic demand, he added.
Coal-fired Tanjung Jati B power plant, which is under
construction, requires 4.5 million tons of coal annually to
produce 1,300 Megawatts of power.
Jeffrey said the higher production volume would be met by
existing coal producers that planned to increase production. For
instance, second-largest coal producer PT Kaltim Prima Coal plans
to raise production up to 24 million tons from an average 18
million tons per year.
Additional production would also come from several new coal
mining companies, including PT Garda Tujuh Buana, PT Kalimantan
Energi Lestari, PT Marunda Graha Mineral and PT Mandiri Perkasa.
Top coal producers for this year are PT Adaro (22 million
tons), Kaltim Prima Coal (18 million tons), Arutmin (14.5 million
tons), Kideco (12 million tons), state-run coal mining PT Tambang
Batubara Bukit Asam (11 million tons) and Berau Coal (8 million
tons).
Aside from rising demand, coal producers also expected an
improvement in price.
Jeffrey said the price of coal averaged US$38.89 per ton for
high-quality coal, a jump from $24 in the second quarter of 2003.
He said the price would stabilize to around $30 per ton.
"The acceptable range for producers and buyers is between $30
and $32 per ton."
He added that the APBI expected to maintain the price at an
acceptable rate to give producers space to improve their existing
capacities.
Despite the bright outlook, Jeffrey said problems related to
fiscal policies and legal issues still persisted, hindering new
exploration.
Among the problems are value added tax, illegal coal mining
and Law No. 41/1999, which outlaws mining in protected forests.