Indonesia’s coal exports are expected to rise to 330 million tons in 2013, up 6.5 percent from a year ago, the chairman of the Indonesia Coal Mining Association said on Thursday.
Indonesia is the world’s top exporter of thermal coal, largely used to fuel power stations in China and India. Its mineral sector including coal is worth $93 billion and contributes 12 percent to the country’s gross domestic product.
“Exports remain high because domestic consumption is still small,” Bob Kamandanu said on the sidelines of a conference in Singapore, adding that demand from key consumer China, especially for low-quality coal, was quite strong.
“India always needs coal and [exports to India] will continue to increase,” he also said.
Kamandanu said the government had lifted a ban on exports of low-grade coal as the coal industry has suffered from low prices during the slowdown of the global economy.
He said he did not expect the government to re-instate the export ban for at least the next two to three years.
Indonesian coal miners have been affected broadly by recent low coal prices that have forced many higher cost operations out of the market. The benchmark Newcastle spot index has recovered slightly this year after dropping by a third last year to lows of around $80 a ton.
Kamandanu also raised the forecast for Indonesia’s coal output to close to 400 million tons this year, up from a prior forecast of 370 million to 375 million tons.
The rise in the forecast came despite some weather-related output problems at the beginning of the year.
“The first two months of the year there was a lot of rain and production was less than 30 million [per month], but when it gets drier it usually reaches 33, 34 million tons.”