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View all search resultsIndonesian exporters grapple with global shift to higher-grade coal
A global shift in coal markets, along with ongoing geopolitical tensions, have left local miners scrambling to realign their strategy to offset shrinking export opportunities by shifting their focus to domestic sales and making inroads into smelting.
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A tugboat pulls a coal barge through a section of the Batanghari River in Jambi on April 10, 2025. (Antara/Wahdi Septiawan)
I
ndonesia’s coal industry faces mounting pressure as key export markets China and India shift to coal with higher calorific value (HCV) and ramp up production to meet domestic demand.
Faced with shrinking export opportunities, Indonesian coal miners are scrambling to realign their strategy by diverting sales to the domestic market and tightening costs. They are also urging the government to roll back regulations that add financial strain in an already challenging market.
In the first five months of 2025, Indonesia’s thermal coal exports to China and India slumped 12.3 percent and 14.3 percent, respectively, outpacing the overall drop in the two countries’ coal imports of 10 percent in China and just over 5 percent in India.
Asia’s two largest economies are increasingly turning to alternative suppliers, particularly those that offer higher-grade coal. In the January-May period this year, Mongolia’s coal exports to China surged 44.8 percent while South Africa’s coal shipments to India jumped 26.1 percent.
“[HCV] coal is more expensive but yields more energy for every dollar spent,” Vasudev Pamnani, director at Indian coal trader i-Energy Natural Resources, told Reuters during an interview.
“One million tons of [HCV] coal can replace up to 1.5 million tonnes of Indonesian supply,” he said.
Analysts noted that Indian coal traders had increased their purchases from Kazakhstan, Colombia and Mozambique, favoring their higher-grade offerings.
