Indonesia’s Adaro sells coal to European buyers ahead of Russia sanctions

JAKARTA: Indonesia’s second biggest coal miner PT Adaro Energy Indonesia Tbk said on Monday it has shipped roughly 300,000 tonnes of coal to some buyers in Europe, where countries are seeking a new source of the fuel due to sanctions on Russia.

The coal was sold via the spot market, chief finance officer Lie Luckman told media, but added the company would continue to focus on its longstanding customers.

“Indeed there has been some demand from Europe, but our market is mainly Asia. We will focus on fulfilling our commitments to our customers who already have long-term contracts with us,” Luckman said.

Demand from Europe would likely increase, but markets such as Japan, China, South Korea and India, which are among Adaro’s biggest buyers, would remain priorities, he said.

The European Union earlier this month imposed sweeping sanctions on Russia over its invasion of Ukraine, which included banning imports of Russian coal from mid-August.

Luckman said the firm had sold to buyers in the Netherlands and Spain.

Coal prices have surged over the invasion, which Russia calls a “special military operation”. That helped top thermal coal exporter Indonesia to post record high exports in March.

Despite higher prices, Luckman said it was too early to increase the firm’s production plan. The company’s 2022 output guidance was 58 million to 60 million tonnes.

“We focus on keeping our production going. We don’t want any production disruption in the middle of these difficult conditions,” Adaro’s chief executive Garibaldi Thohir said.

The Indonesia Coal Miners Association said the country’s output was already at capacity and some miners had faced production difficulties due to wet weather earlier this year.