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Wednesday, 05 June 13
DON'T AVOID PAYING COAL ROYALTY TO THE GOVERNMENT - INDONESIAN ENERGY MINISTER


COALspot.com – “Every country has the right to make policies to protect their national interests”, Energy and Mineral Resources Minister of Indonesia Jero Wacik replied to a question related to China’s proposed import ban on low calorific value coal on the sidelines of the 19th CoalTrans Asia conference at the Bali International Convention Center in Nusa Dua, Bali. The minister further said, the government would increase coal exports to other countries, including India, look to new markets and encourage domestic consumption, if China imposes the ban on lower grader coal.

According to minister demand for coal is still high, and it will continue to be increases. The current low prices are just for temporary period, and the coal prices will increase again soon once world economy returns to its normal condition.

“Don’t avoid paying coal royalty to the government”, he requests coal producers to pay the royalty on time as per the government regulation.

China is reportedly considering to ban imports of lower calorific value coal because these types of coal create high pollution. China’s decision, if implemented, would hurt Indonesia’s low calorific value coal producers. In the meantime, it will be benefited for high calorific value producers. The  Chinese coal buyers as well as Indonesian coal suppliers were saying, during 19th CoalTrans Asia conference, China is considering banning coal with calorific value below 3700 on NAR basis instead of previously 4540 NAR coal.  However,  some of the participants of coal conference are in an opinion that, the ban will not be implemented immediately.

In the meantime, the demand for 3800 GAR to 4200 GAR coal is still high and Indian buyers are looking for similar coal for Indian market.

“The demand is there, but the asking prices for 3800 GAR coal are very low”, said a coal producer. According to the producer, who is producing coal from central Kalimantan, the bids are around US$ 35 per MT fob vessel, which is far below than current offer prices. 

In the meantime, a south Sumatra coal producer said, the price differences between their offers are bids that they are receiving is very narrow.  “ The difference between our offer and bids are around US$ 0.50 to US$ 1 per ton” said the same producer who is producing around 100,000 tons of coal every month.

The immediate future of coal market direction is unpredictable at this moment. No stakeholder of coal industry is able to give a firm forecast neither on direction of coal market nor price.   



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