Indonesia anticipates surge in coal production in 2012

Indonesia’s production of thermal and coking coal is forecasted to increase by 5.5 percent to 380 million tons in 2012, according to Supriatna Suhala, the executive director of the Indonesian Coal Mining Association.

Coal production is set to surge next year as coal miners bolster their businesses and several new mines commence production, the nation’s miners say.

The Energy Ministry’s forecast for coal production next year is 332 million tons, but that estimate does not include the output of smaller mining companies.

Indonesia exports the majority of its coal to China, India and Japan.

China’s demand for coal is expected to double in the next five years to 6 billion tons, according to the APBI. Meanwhile, coal is used in Indonesia’s power plants to make up for insufficient supplies of natural gas, which is locally produced in large amounts but most of which is exported.

Meanwhile, domestic consumption is regulated under domestic market obligations. The Energy Ministry said that next year 63 coal producers were obliged to supply as much as 82 million tons for domestic consumption, a 4 percent increase from this year’s requirement.

The coal is allocated to state-owned electricity company Perusahaan Listrik Negara, which uses as much as 57 million tons — 70 percent of the total demand.

The remaining coal will be allocated to cement factories, gold and copper producers Newmont Nusa Tenggara, Freeport Indonesia and Antam and nickel producer Inco.

Supriatna said global energy demand was prompting many coal miners to ramp up production and pushing non-energy companies to expand into coal mining. He said more countries, such as Kenya, Bangladesh and Pakistan, were seeking to import coal from Indonesia.

“Industries see it as an interesting time to invest in the coal mining sector,” Supriatna said.

The sector’s activities are focused on the resource-rich island of Kalimantan.

The full sotry is available at Jakarta Globe.