Update COVID-19 in Indonesia: 28,233 confirmed infections, 1,698 deaths (3 June 2020)
03 June 2020 (closed)
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The Indonesian government cannot inform yet about the exact impact of the recently introduced ‘Listed Exporter’ status (Indonesian: Eksportir Terdaftar, ET) on Indonesian coal exports. In the first three quarters of 2014, Indonesia exported a total of 234.8 million tons of coal. The government targets to produce between 390 and 420 million tons of coal this year (of which 90 million tons are required to be absorbed by the domestic market). However, newly introduced rules in the coal industry have led to confusion and may limit coal exports.
The aforementioned new framework stipulates that Indonesian coal miners need to obtain a ‘listed exporter’ status from Indonesia’s Energy and Mineral Resources Ministry to export coal. This new rule applies to both Coal Contracts of Work (PKP2B)-holders and Mining Business Permit (IUP)-holders. This new policy was supposed to be implemented on 1 September 2014 but was delayed by one month because many Indonesian miners faced difficulties to obtain the new license amid a lack of clarity about the procedures to obtain the license. The government decided to implement this new export policy in order to optimize state revenue from the coal mining industry and have more supervision on coal exports (as illegal coal shipments are a structural problem).
To obtain the ET, Indonesian coal miners need to seek a recommendation from the Ministry for Energy and Mineral Resources first as stipulated by Regulation of the Director General of Mineral and Coal No 714 K/30/DJB/2014 (Peraturan Dirjen Minerba No 714 K/30/DJB/2014). To obtain the recommendation, the miner is required to show documents that prove it has met tax and royalty payment obligations. It is also mandatory to have the clean and clear certificate (CnC). This CnC certificate shows that the miner has no outstanding royalty and other tax debts, fulfilled exploration and environmental commitments, has no property delineation issues and obtained forestry permits.
Bambang Tjahtjono Setiabudi, Director of Coal Exploitation Development for the Ministry of Energy and Mineral Resources, said that his ministry has already issued a recommendation for 160 Indonesian coal miners: 36 PKP2B-holders and 91 IUP-holders. The remaining 33 are coal trading and transportation firms (IUP OPK)-holders. There are 73 PKP2B-holders and 1,394 IUP-holders currently active in Indonesia. About 80 percent of Indonesia’s total coal production is supplied by PKP2B-holders, the remainder by IUP-holders.
Meanwhile, Secretary General of the Indonesian Energy and Coal Suppliers Association (Aspebindo) Ekawahyu Kasihsaid said that Indonesia’s coal exports will not be significantly affected by the new rules as the country’s large coal mining companies show continuously rising production and export rates.
Coal Production Indonesia in 2014
Indonesia produced 310.8 million tons of coal in the first three quarters of 2014, a 4 percentage point growth from the same period last year. This growth is small compared to previous years, mainly caused by government policy that aims to slow the country’s coal production growth in an attempt to safeguard future supplies to local power plants. Therefore, the government capped this year’s total coal production at 420 million tons. However, coal exports may exceed this maximum limit due to illegal shipments.
The global coal industry has been facing a rough time as coal prices are down due to an oversupply in the global market. The Indonesian coal price reference (HBA) was set at USD $67.26 per ton in October 2014, down 3 percent from USD $69.69 per ton in the previous month.
Indonesian Coal Statistics:
in million tons
Source: Ministry of Energy and Mineral Resources