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Tuesday, 15 March 11
COAL PRODUCTION FORECAST TO SURGE ON RISING PRICES - THE JAKARTA GLOBE


The Jakarta Globe  reported that, Indonesia’s coal production is forecast to increase by 20 percent this year as coal prices continue to rise, according to the Indonesian Coal Mining Association.

Supriatna Suhala, executive director of the association, also known as the APBI, said the country’s coal production may reach 360 million tons this year, 6 percent more than the association’s original target of 340 million tons.

The country’s coal miners produced 300 million tons of coal last year, less than their original target of 320 million tons.

Unseasonably heavy rains generated by the La Nina climate phenomeon were widely blamed for disrupting all areas of mining, including coal and tin, two of Indonesia’s top exports.

“Coal prices keep increasing. This triggers coal miners to boost their production,” Suhala said on Monday. The association’s coal production target differs from that of the government, which set projected coal production at 275 million tons.

As of Friday, coal prices stood at $129.6 per ton, up slightly from the previous week’s price of $129.48 per ton, according to the Australian Newcastle Thermal Coal Index, which serves as a benchmark for Asia.

Suhala said coal prices would remain steady above $120 per ton this year. “As long as the economic condition keeps getting better, coal prices will keep steady at those levels,” he said.

He also said he expected demand for exports to grow, with demand from India and China projected to increase 15 percent as their economies grow at an 8 percent clip.

In light of Japan’s devastating earthquake and tsunami on Friday and the subsequent power shortages, Suhala said coal exports to Japan would increase as five nuclear power plants have been shut down following the disaster. Indonesia exports 45 million tons of coal to Japan annually, making it the top destination for Indonesian coal.

As of the first quarter this year, Suhala said, Indonesian coal miners produced an anticipated 80 million tons of coal, or around 22 percent of the total target of 360 million tons this year.

La Nina is not expected to affect coal production targets this year, he continued. “Weather is no longer a problem this year,” Suhala said.

Berau Coal, one of the country’s biggest coal miners, said coal production in the first quarter should remain on target for 5 million tons, according to Singgih Widagdo, a spokesman for Berau Coal.

“We are expecting to produce 20 million tons for the whole year,” Singgih told reporters on Monday. The company’s production so far is 12.5 percent of last year’s 17.5 million tons, he said.

Indonesia is home to several coal miners, including Bumi Resources, the world leader in thermal coal exports.
Source: The Jakarta Globe
(By:Ririn Radiawati Kusuma)



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