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Energy
This Week in AsiaEconomics

Indonesia may allow coal exports to resume from Tuesday, after Philippines, Japan, South Korea voice concerns

  • Senior minister Luhut Pandjaitan says domestic demand has now been met and that some ‘big vessels’ can be released
  • News likely to be welcomed by regional economies such as the Philippines, whose energy secretary Alfonso Cusi wrote to Jakarta last week urging a rethink

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A tug boat pulls a coal barge along the Mahakam River in Samarinda, East Kalimantan province, Indonesia. Photo: Reuters
Su-Lin Tan
Indonesia has said it may allow coal exports to resume as soon as Tuesday, in a development likely to be welcomed by under-pressure regional economies that rely on the fuel.

Senior minister Luhut Pandjaitan said on Monday that domestic demand had been met and that as a consequence, “End of today or tomorrow we can release some of the big vessels”. The minister, speaking in an interview with CNBC, also said Jakarta was now drawing up a new pricing structure for the so-called domestic market obligation so the state utility firm PLN buys coal at market price.

Regional countries reliant on supplies from Indonesia – the world’s largest thermal coal exporter – have in recent days been urging Jakarta to rethink its ban, which came into force at the start of the year as state-owned power utility Perusahaan Listrik Negara (PLN) battled a shortage.

On Monday, Manila said its energy secretary Alfonso Cusi had reached out to Jakarta in a letter last week, asking it to lift the ban “specially for the Philippines”.

“In his letter, Secretary Cusi stressed the healthy economic cooperation between the Philippines and Indonesia and that Indonesia’s recent policy will be detrimental to economies that currently rely on coal-fired power generation systems like the Philippines,” a statement from the Filipino department of energy said.

Workers pass a boat carrying coal at a port in Palembang, South Sumatra province, Indonesia. Photo: Reuters
Workers pass a boat carrying coal at a port in Palembang, South Sumatra province, Indonesia. Photo: Reuters
Concerns have been raised by some Indonesian miners and analysts that “poorer” coal-buying countries like the Philippines have lower stockpiles than “richer” buyers such as Japan and South Korea and are therefore more likely to face shortages caused by the ban. Poorer countries are also less able to compete for more expensive coal at short-notice from alternative suppliers such as Russia or Australia.
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