10 Mar 2022

Indonesia Coal Miners in Talks with Buyers Seeking Russian Alternatives

10 Mar 2022  by   
Indonesian coal miners are holding exploratory talks with buyers seeking alternatives to Russian coal, although some other countries may be better placed to supply the European market, a senior official of an industry association said on Wednesday.

Russia’s invasion of Ukraine has prompted buyers of Russian coal and gas to seek alternative power sources and has boosted the Indonesian coal benchmark price for March to $203.69 per tonne, the second-highest monthly price on record.

While the opportunity is “very interesting”, Indonesian Coal Miners Association executive director, Hendra Sinadia, said miners were currently focused on recovering production and meeting existing contracts after an unexpected export ban brought in by Jakarta in January.

Indonesia has since resumed exports, but the government has tightened mandatory domestic sales rules and will only allow exports for miners meeting requirements.

Indonesia has set a target of 663 million tonnes of coal production this year and potential exports of 497 million tonnes, director of mineral and coal programmes at Indonesia’s energy ministry, Sunindyo Suryo Herdadi, said during an online panel discussion with foreign correspondents.

Meanwhile, Hendra told the discussion Indonesia may not be in the leading position to meet any additional demand in Europe.

“Another challenge is also the weather and competitiveness of our freight in order to serve the Atlantic market. Because we believe Colombia and South Africa are in the better position to serve the market in Europe should they look for substitutes from Russia,” Hendra said.

Indonesia, the world’s biggest thermal coal exporter, mainly ships to buyers in China, India, South Korea, Japan, Taiwan and other countries in Southeast Asia.


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