Thermal coal output in the world's top exporter, Indonesia, is seen rising 8.3 percent this year, as miners increase production to take advantage of strong prices, an industry grouping said on Monday. Indonesia's thermal coal production will be 390 million tonnes in 2012 versus 360 million tonnes last year, Bob Kamandanu, chairman of the Indonesian Coal Mining Association, told Reuters.
Kamandanu had previously estimated 2011 coal output at 354 million tonnes, up from 320 million tonnes in 2010. Australian thermal coal on the globalCOAL Newcastle index, the benchmark for Asian coal, closed at $116.55 a tonne on Friday. Weaker demand has kept a lid on thermal coal prices in recent months, after prices plummeted from a high of over $125 tonne seen in the first quarter of 2011. Most Indonesian coal is mined in East Kalimantan, Central Kalimantan, South Kalimantan and South Sumatra.
The archipelago of 17,000 islands produces mainly low grade coal, used predominantly in emerging markets, with top importers being China, India and South Korea. Both India and China have launched aggressive and ambitious plans to ramp up power supplies in the coming years.