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Govt boosts annual coal mining target to 695m tonnes
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Coal mining activities take place at the Binungan mine in East Kalimantan, operated by PT Berau Coal. (JP/Indra Harsaputra)
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he Energy and Mineral Resources Ministry has raised the country’s annual coal production target to 695 million tonnes this year to cater to robust demand for the commodity.
The country plans to export more than 74 percent of the coal it mines this year, some 518 million tonnes, which the ministry said would mean record shipments.
The respective production and export targets are up slightly from last year’s realized 687 million tonnes and 494 million tonnes, ministry data shows.
“We are increasing production to meet targets. Price and global demand for coal will remain robust,” said Energy and Mineral Resources Minister Arifin Tasrif at a press briefing in Jakarta on Monday.
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The production realized last year exceeded the ministry’s target of 663 million tonnes, even though miners retained output during a month-long export ban in January and experienced operational disruptions during the year due to heavy rains.
The country’s domestic coal consumption, however, is projected to drop to 177 million tonnes in 2023, down 9 percent from last year’s 193 million tonnes.
Global coal use has risen significantly over the past years, leading to record-high prices in 2022 driven by supply disruptions, partly due to the war in Ukraine and demand for coal as a substitute for increasingly expensive natural gas. But many predict prices will begin to normalize this year.
Arifin expected coal prices to remain elevated this year, although not quite as high as last year, as supply disruptions would persist while demand for coal remained robust.
The government’s monthly benchmark coal price in January fell to $305.21 per tonne after peaking at US$330.97 per tonne last October.
“Coal prices are expected to hold up well in 2023 because of global energy supply and demand balance problems that still need some support from coal,” he told reporters.
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The World Bank’s commodity outlook report concluded in October 2022 that new policies in the European Union and United States to boost renewable energy use and reduce overall energy consumption would reduce natural gas and coal consumption in both the short and medium term.
The organization predicted an easing of coal prices this year but a maintenance of relatively high levels as industries substituted away from natural gas toward coal and households cut consumption.
