Indonesian’s Coal Production has to be maintained. Excessive production increase could restrain or event lower the coal prices increase rate.

Indonesian’s Coal Production has to be maintained. Excessive production increase could restrain or event lower the coal prices increase rate.

Jakarta, Kompas – Rising trend of coal price lately has to be balanced with the production.  Excessive production could restrain the price increase rate or even lower the price increase rate.

“ To protec their coal industry, China seems to adopt price regulation policy to maintain coal price around 61-81 US dollar per ton. However, the tendency of coal company to increase production needs caution. Excessive supply will not be able to control the price,”said Chairman of Indonesian Mining Institute, Irwandy Arif on Tuesday (16/5) in Jakarta.

Coal price reference for May 2017 was recorded to be 83.81 US Dollar per ton. That price was a climb compared to that on April 2017, which was 82.51 US Dollar per ton and on March 2017, which was 81.9 US Dollar per ton. On December 2016, coal price touched 100 US Dollar per ton due to soaring demand to fulfill winter season in China.

Irwandy added, coal price, especially in Asia region, was heavily influenced by the policy of China and India.  India’s Policy to reduce import on coal had not run well.

In addition, advancement of renewal energy in that country was not as fast as expected. Additional Coal Production in China also had not directedly affected the price.

“Those policies influence directly to coal price. If the passion to increase the production in domestic can be controlled, price of coal can sustain until the end fo this year,” said Irwandy .

Significant Reduction

Government Policy implemented on National Development Plant for Medium Term 2015-2019 stated that Indonesian Coal Production would continously be reduced to 400 ton in 2019. That reduction is quite significant compared to production in 2015, which was 425 million ton. Eventhough the production is reduced, domestic coal supply is enlarged until 2019.

“This year, coal production target is 413 million ton, meanwhile domestic quota is 121 million ton.  Production for 2019 will be 400 million ton and domestic supply quota is 240 million ton,” said Sujatmiko, Head of Communication Bureau and Cooperation Ministry of Energy and Natural Resources.

On description given by Freddie Staermose, Vice President Generation Fuel and Dry Bulks Argus Media, on the event of 23th Convention and Exhibition Coaltrans Asia, Monday (15/5), on Nusa Dua Bali, as quoted from activity page, growth demand on coal in Asian Region is still high. That condition potentially will increase coal price continously several years to come.