Ban On Indon Coal Exports Hits China Hard
Indonesia's state utility secured an extra 7.5 million tons of coal supplies on Tuesday, helping to avert power outages, boost stocks and increase the chances of the government lifting its export ban soon, Fransiska Nangoy and Bernadette Christina reported for Reuters.
Photo Insert: South Kalimantan province is an area in Indonesia known for its natural resources, coal mines, in particular.
Indonesia, the world's top exporter of the coal used in power plants and China's largest overseas supplier, on Saturday announced a ban on exports during January to avoid outages at domestic generators.
The move has driven up coal prices in China, though Indonesian authorities are set to reexamine the ban on Wednesday. China imported 177 million tons of Indonesian thermal coal in the first 11 months last year, an increase of 54 percent compared with the same period in 2020, the South China Morning Post (SCMP) reported.
State utility Perusahaan Listrik Negara (PLN) said that while it had secured the additional supply, it aimed to continue to raise stockpiles to a minimum usage level of 20 days.
"Coal power plants that have been in crisis are starting to see their supply issue being resolved," Darmawan Prasodjo, PLN chief executive said in a statement. A PLN spokesperson could not immediately comment on how much more supply PLN needed for the intended stock level. PLN had previously said it needed 5.1 million tons of additional supply for January to avoid widespread outages.
Pandu Sjahrir, chairman of the Indonesian Coal Miners Association (ICMA), said the group's ten biggest members would help PLN close the supply gap as a "very short-term solution."
A full month ban could be averted by such coordination, said Rory Simington, principal analyst for Asia Pacific coal research at Wood Mackenzie.
Indonesia’s sudden coal export ban came after China warned Jakarta not to “intrude” in Chinese waters in the Natunas, which is thousands of kilometers away from China and well within Indonesia’s exclusive economic zone under the UN Convention of the Law of the Sea (UNCLOS).