Indonesia explores new coal markets with buyers shunning Russia

 

Bloomberg

Indonesia, the world’s top coal exporter, is exploring new markets outside its typical strongholds in Asia-Pacific as buyers seek alternatives to Russian supplies after its invasion of Ukraine.
Miners have been contacted by buyers in some Western and European countries as a substitute for Russian supplies, Hendra Sinadia, deputy executive director of the Indonesian Coal
Mining Association, said in an online webinar. Talks are still exploratory, as Indonesian companies are focused on meeting existing commitments after the government forced them to halt exports in January, he said.
Indonesia’s biggest customers are nearby mega-users like China and India. One problem with increasing exports to Europe is the shipping distance, as buyers are likely to prefer nearer countries with cheaper freight costs, Sinadia said. Australian miner Whitehaven Coal Ltd said it’s received inquiries from as far away as Poland.
Coal prices have skyrocketed this month as utilities in Europe, along with other major consumers, hunt for alternatives to cargoes from Russia.
The government is currently in discussions and could be considering an option to increase the royalties paid by mining companies amid surging commodity prices, Sunindyo Suryo Herdadi, director of mineral and coal program development at the energy ministry, said.
Indonesia halted exports in January to make sure local power plants had sufficient supply. The country enforces a domestic market obligation on miners, in which they have to sell at least 25% of their output locally at $70 a ton or less.

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