Indonesia aims to halve coal exports over the next three years as domestic demand grows and production falls, an energy ministry official said on Thursday. Coal exports are expected to drop to 160 million tonnes in 2019, down from a forecast 308 million tonnes this year, said Hersonyo Wibowo, who heads the coal division at Indonesia's energy ministry.
"After 2019 production is targeted to be flat at 400 million tonnes but in the future domestic consumption will increase, especially for electricity, and exports will decline," Wibowo said. The world's top thermal coal exporter aims to produce 419 million tonnes of coal this year but it was not immediately clear how the government planned to limit production, the bulk of which is currently shipped to China and India.
"We haven't put production limits in place yet. Once they are in place we will be more strict," Wibowo said. Last year Indonesia produced 460 million tonnes of coal, Wibowo said, noting that he expects output to exceed the targetted amount this year, due to higher prices.
Indonesia shipped 3.71 million tonnes of coal to China in August, up 55.8 percent from a year ago, amid improving prices and demand, which is expected to continue next year. Demand for coal at Indonesia's power plants, meanwhile, is expected to climb to 119 million tonnes in 2019, up from the 86 million tonnes that are expected to be consumed domestically this year, Wibowo said.
"We must fulfil all domestic market obligations," he said, adding that the government was trying to make the domestic market more attractive by various means, including coal liquefaction and gasification projects. The benchmark Asian thermal coal price, the Newcastle weekly index, rose to nearly $110 a tonne in the week ended November 11, its highest in 4-1/2 years and 116 percent higher than at the end of last year.
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