Coal Trade Indonesia-Philippines Disturbed by Abu Sayyaf Ship Hijackings
Coal shipments between Indonesia and the Philippines are disrupted by the recent series of incidents that occurred in the seas off the coast of the southern Philippines. Two Indonesian coal ports are now (temporarily) disallowing Indonesian ships from transporting coal to the Philippines. Security concerns heightened after members of the militant Al Qaeda-linked Abu Sayyaf network (based in the southwestern part of the Philippines) captured 18 Indonesians and Malaysians in three separate ship hijackings in recent weeks. It is feared that the waters around the southern Philippines become the new Somalia.
The Indonesian ports of Banjarmasin and Tarakan on the island of Kalimantan are temporarily not granting permits for coal exports to the Philippines due to aforementioned safety concerns. Kalimantan is one of the key coal-producing regions in Indonesia. It is estimated that the Philippines imports approximately 15 million tons of coal per year from Indonesia (worth approx. USD $800 million) to feed their power plants (around 70 percent of the country's total coal imports originates from Indonesia). Although this is not an impressive figure, in times of weak coal demand any export is welcome. Indonesia is the world's largest thermal coal exporter, known for its low grade coal. However, due to sluggish global growth (particularly rapidly declining economic growth in China) the coal price has tumbled significantly in recent years and has put severe pressure on coal miners.
The Indonesian Coal Mining Association (APBI) expects more ports in Indonesia to follow the example that has been set by Banjarmasin and Tarakan thus suspend coal shipments to the Philippines. However, the institution also said that illegal coal shipments (something that is pretty rampant in the Southeast Asian area) will most likely continue. The Philippines said it may now decide to import (more costly) coal from South Africa, Australia or Russia.
Indonesian authorities want to raise security in the waters around the southern Philippines (Sulu Sea) in order to avert a situation that is seen in Somalia. In media it has been reported that the foreign ministers of Indonesia, Malaysia and the Philippines are set to meet in Jakarta (possibly in early May) to discuss the possibility of joint patrols in the region.
State-controlled coal miner Tambang Batubara Bukit Asam said it now diverts its shipments for the Philippines to Hong Kong. Bukit Asam exports around 1 million tons of coal to the Philippines every year.
Indonesian Government's Benchmark Thermal Coal Price (HBA):
| Month | 2012 | 2013 | 2014 | 2015 |
2016 |
| January | 109.29 | 87.55 | 81.90 | 63.84 | 53.20 |
| February | 111.58 | 88.35 | 80.44 | 62.92 | 50.92 |
| March | 112.87 | 90.09 | 77.01 | 67.76 | 51.62 |
| April | 105.61 | 88.56 | 74.81 | 64.48 | 52.32 |
| May | 102.12 | 85.33 | 73.60 | 61.08 | |
| June | 96.65 | 84.87 | 73.64 | 59.59 | |
| July | 87.56 | 81.69 | 72.45 | 59.16 | |
| August | 84.65 | 76.70 | 70.29 | 59.14 | |
| September | 86.21 | 76.89 | 69.69 | 58.21 | |
| October | 86.04 | 76.61 | 67.26 | 57.39 | |
| November | 81.44 | 78.13 | 65.70 | 54.43 | |
| December | 81.75 | 80.31 | 69.23 | 53.51 |
in USD/ton
Source: Ministry of Energy and Mineral Resources
Indonesian Production, Export, Consumption & Price of Coal:
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| Production (in million tons) |
217 | 240 | 254 | 275 | 353 | 412 | 474 | 458 | 376 |
| Export (in million tons) |
163 | 191 | 198 | 210 | 287 | 345 | 402 | 382 | 296 |
| Domestic (in million tons) |
61 | 49 | 56 | 65 | 66 | 67 | 72 | 76 | 80 |
| Price (HBA) (in USD/ton) |
n.a | n.a | 70.7 | 91.7 | 118.4 | 95.5 | 82.9 | 72.6 | 60.1 |
Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources
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