COAL DEMAND CONTINUES TO RISE

Indonesian Coal Mining Association (APBI) predicted that coal demand in both the domestic and export market will continue to increase, along with the increasing coal consumption. Moreover, coal will replace natural gas as primary fuel for producing electricity in Southeast Asia (ASEAN) as energy consumption in this region is estimated to double in the next decades, according to reports from the International Energy Agency (IEA).

The ten ASEAN member countries, whose growth of energy demand is twice the global average, will replace 49% of its energy with coal starting in 2035 or only a 31% increase in 2011. The percentage of gas usage reportedly will drop to 29% from 44%. According to IEA, as far as it is more profitable when using coal instead of gas, the use of energy in Southeast Asia will be supported by Indonesia as an exporter of hot coal which production will double by 2035.

However, APBI Chairman, BOB Kamandanu, in Jakarta (Wednesday, October 2), reminded that high demand for coal in Indonesia should be coupled with clean energy campaign which is more intense in the world. Bob said that the US government some time ago called for the need of low-emission coal energy. China also called for the same thing, including planned to ban import to lo-grade coal that produces high emissions.

However, he stated that there is no certainty yet on the ban on imports of low-grade coal (low-rank coal) to China. He insisted that coal entrepreneur is not afraid if the import ban is implemented. If the ban was imposed, exports will be diverted to other countries such as Pakistan, Sri Lanka, India, and other ASEAN countries. He is optimistic that Indonesia coal producers can explore the markets outside China. He explained that Indonesia’s coal export to China reached 90 million tons, half of which is dominated by low-grade coal.

Bob said that coal has been blamed as one of the sources of global emissions, so it must be taken seriously by the government and coal businesses in order to reduce emissions which are increasing. United Stated is reducing coal consumption. Even, the country plan to prohibit banks to help finance coal power plants, which will certainly affect the coal business. “The need for coal is increasing, but we must heed the call of the consumer countries”, he said.

Bob reported that citing data from the British Petroleum Statistical Review of World Energy 2013, Indonesian coal production rose by 273% in the last ten years. Currently, Indonesia produced 6.2% of total global production. This means that Indonesia occupies the third highest position in the world as a coal producer. He said that coal contributed about 67% of total energy production in Indonesia, followed by gas at 18% and oil at 13%. The three have a 32%-33% share of energy production in the past 10 years.

He said that Indonesian coal exports rose 21% in the first 5 months of this year. Data from the Ministry of Trade mentioned that the volume of coal exports during January-May reached 163,900.000 metric tons. Currently, the abundant supply of coal causes coal prices to fall. Coal supply is still abundant, because producer countries, besides Indonesia, are increasing production. 

Business News - October 4, 2013