In the first half of the year, coal production reached 122 million tons or about 4.2 percent higher than the same period last year, according to the Indonesian Coal Mining Association (APBI).

For the July-December period, APBI chairman Bob Kamandanu, said that the country's total production may increase by 5.7 percent to 128 million tons, from 121 million tons in the same period last year.

The increase, he said, was because the largest players in the industry increased production. The largest players in the industry include PT Bumi Resources, PT Adaro Indonesia, PT Kideco Jaya Agung, PT Berau Coal and PT Bukit Asam.

While production is rising, exports are predicted to remain relatively flat, close to the level of 160 million tons.

Bob said that declining demand from overseas industries, as they reduced their coal imports, mostly due to the global economic crisis, was the reason behind the stagnation in the country's coal exports.

"Companies from the export destination countries requested to reduce their imports by between 10 percent and 20 percent earlier this year," he said, adding that China might reduce its coal imports by 5 percent this year.

Therefore, the association expects a minor growth in exports this year, only by between 2 percent and 3 percent, to between 163.2 million and 164.8 million tons, from 160 million tons last year.

Domestic consumption meanwhile is expected to increase by 15.38 percent to 90 million tons this year, from 78 million tons last year.

He said domestic demand, showing a different pattern from exports, was still dominated by industries, such as the State Electricity Company (PLN) and coal-fired power stations like PT Paiton Energy.

Domestic coal prices averaged around Rp 600,000 per ton depending on its quality, up 18.28 percent from Rp 507,240 per ton last year, he said. (nia)

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