Indonesia domestic coal reduction

The Indonesian government has decided to reduce the amount that coal miners must sell in the domestic market this year by 18 percent due to lower consumption by power plants.

Miners must allocate 67.3 million metric tons of coal under the so-called domestic market obligation, down from the previous requirement of 82.1 million tons, said Edi Prasodjo, the coal business director at the Energy and Mineral Resources Ministry.

The quota was cut because some plants aren’t ready to start commercial operations, he said.

Perusahaan Listrik Negara, the state-owned utility firm, will need 37.2 million tons this year, according to an Oct. 31 decree signed by Thamrin Sihite, the ministry’s director general of mineral resources and coal. That’s lower than the previously estimated consumption of 57.2 million tons.

This year’s domestic coal sales obligation for Kaltim Prima Coal, a unit of Indonesia’s biggest coal producer, Bumi Resources, will be cut to 9.3 million tons from a requirement of 12.7 million tons set in August of last year, according to the ministry’s decree.

Adaro Indonesia, a mining unit of Adaro Energy, will set aside 9.8 million tons compared with its earlier requirement of 11.7 million tons.

Helmi Najamuddin, head of the coal division at PLN, previously said that the firm had enough coal supply until 2014.

According to Helmi, PLN has coal-procurement contracts for 69.2 million tons lasting through 2032, while consumption currently stands at around 31.9 million tons.

Helmi said PLN plans to open several coal-fired power plants this year, with a combined capacity of about 3,000 megawatts, including the 1,050-MW plant at Pelabuhan Ratu, West Java.

That would increase coal consumption to 41.4 million tons for the year.

He predicted that consumption would once again surpass supply by 2015.

“Based on our working plan, and with the commission of several coal-fired power plants, we estimate that consumption will reach 88.8 million tons by 2015,” he added.

Indonesia is the world’s largest coal exporter, and produced 217 million tons of the product as of July this year.

Of that amount, 78.8 percent, or 171 million tons, was shipped overseas.