MARKETS

Indonesian coal output plunges

THE Indonesian coal crunch has led to nearly a 20% reduction in exports for the first five months...

Blair Price

According to Bloomberg, Energy and Mineral Resources Ministry coal business director said the nation’s coal production fell by 19% year-on-year to 166 million tonnes over January to May inclusive.

Exports also slipped 19% in this timeframe – falling to 135Mt while domestic sales fell 9% year-on-year to 31Mt.

Last month Macquarie Wealth Management credited most global output cuts of thermal coal this year to Indonesia’s small to medium sized exporters.

“One must remember that the majority of Indonesian mining costs are US dollar-denominated and hence their competitive position has deteriorated over the past nine months,” Macquarie said at the time.

“On top of that, when looking at ease of supply cutting globally, Indonesian producers are, notwithstanding the fact that many are highly indebted, probably top of the list because they aren’t as burdened by infrastructure and other labour-force related liabilities.”

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