An official at Indonesia's Ministry of Energy and Mineral Resources stated that the production of coal in the first four months of 2014 grew five percent (year-on-year) to 147 million tons. As such, the country is still on track to meet this year's coal production target of 426 million tons. Exports of Indonesian coal totaled 109 million tons in the January-April 2014 period, while the remainder (38 million tons) was sold on the domestic market. Indonesia, Southeast Asia's largest economy, is one of the world's largest producers and exporters of coal.
Indonesian Coal Statistics 2006-2013:
in million tons
Source: Ministry of Energy and Mineral Resources
What drives the increase in Indonesian coal production and export?
Coal is the dominating force in power generation. At least 27 percent of the world's total energy output and more than 39 percent of all electricity is produced by coal-fired power plants due to coal's abundance, its relatively easy and low-cost extraction, and less expensive infrastructure requirements compared to other energy resources.
Indonesia contains abundant reserves in medium and low-quality coal. These types of coal are competitively priced on the international market (partly due to Indonesia's low labor wages).
Indonesia's strategic geographical position towards the giant emerging markets of China and India. Demand for low quality coal from these two countries is skyrocketing as they open many new coal-fired power plants to supply electricity to their immense populations. Global coal demand is in fact estimated to exceed global coal production over the next five years, implying rising coal prices.
Domestic coal consumption in Indonesia is relatively low. Increased national production and international demand therefore results in higher exports.