Wednesday, 15 January 2014


The Ministry of Energy and Mineral Resources (MEMR) is targeting coal production in 2014 at 397 million tons, or lower than last year’s actual production. It is as part of efforts to control coal production nationwide. Director General of Mineral and Coal of the Ministry of Energy and Mineral Resources, R Sukhyar, Friday (January 3,2014) asserted that coal production should be limited. It is aimed at optimizing revenues from the mining sector and maintaining adequate reserves of coal as an energy source in the country.

For 2014, the government set national coal production target at 397 million tons, while domestic supply obligation for coal is 95.6 million tons. The production target is lower than the actual production of coal from January to November 2013 which is 421 million tons, and 89 million tons were absorbed by the domestic market.

Sukhyar said that his party wants to focus on optimizing revenue from coal, and not to increase production. Therefore, coal production surveillance system must be improved to prevent unrecorded production and export of coal. He admitted that so far the control has not been optimal so that there is unrecorded production. In addition, coal production is also necessary given that this commodity is one of energy sources which is ready for use. Therefore, there must be efforts to increase coal reserves.

Based on the application of database system developed by the Geological Agency of the Ministry of Energy and Mineral Resources jointly with NEDO, there is a significant change in the amount of coal resources in Indonesia. If the previous amount of coal resources was 26 billion tons, it became 65.4 billion tons now. And, coal reserves from 2.6 billion tons to 12 billion tons.

He warmly welcomes the cooperation between the Ministry of Energy and Mineral Resources and NEDO with focus on management of data and information on coal in increasing our knowledge and understanding of the potential of coal resources and its quality. It is said that the role of coal will increase in the future. Therefore, the existence of data and information that is more accurate and can be accessed easily by coal business operators is very important. Population growth and the demand to protect forests and water resources make expansion or extension more difficult. Thus, attention to develop the underground must begin from now.

Meanwhile, Chairman of the Indonesian Coal Mining Association (APBI), Bob Kamandanu, stated the plan on restrictions of national coal production. Restrictions on the production of this commodity is aimed at securing coal reserves as an energy source and increasing the price of coal in decline.

Bob explained that world economic slowdown is predicted to cause potential decline of world coal prices. He said that the price decline was due to changes in importers’ demand for low-calorie coal. Bob hopes that the government will invite business men to discuss the decline in coal prices. He considered that the discussion should produce policies and strategies that create a shock therapy in the international market.

Drastic decline in coal prices makes holders of mining business license (IUP) in several regions to stop production. Most of the mining companies that closed operations produced low-calorie coal types, namely 4,200 kilos of calories per kilogram aka kcal / kg. Citing data of the Ministry of Energy and Mineral Resources, the average benchmark price of coal is USD 85.39 per ton in 2013, or down 11.81 percent from 2012 which is at USD 95.48 per ton. (E)

Business News - January 8, 2014   

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