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Jakarta Post

Indonesia backpedals on coal production cap

  • Viriya P. Singgih

    The Jakarta Post

Jakarta   /   Fri, December 29, 2017   /   10:18 am
Indonesia backpedals on coal production cap A freight train transports coal in this undated file photograph. (kompas.com/File)

It is unlikely that Indonesia will set a cap on coal production in the near future due to uncontrollable coal mining activities in the country, according to an official.

The government initially planned to reduce domestic coal production from 419 million tons in 2016 to 413 million tons this year. The figure was expected to fall to 406 million tons next year, before hovering at only 400 million tons a year starting in 2019.

However, as of Wednesday, this year’s coal production had reached 477 million tons, already surpassing last year’s achievement of 434 million tons.

“Indeed, we previously expected to produce only 406 million tons of coal in 2018,” the Energy and Mineral Resources Ministry’s mineral and coal director general, Bambang Gatot Ariyono, told reporters on Wednesday.

“But looking at the current condition, it might be impossible for us to prevent all holders of coal mining permits, particularly ones that have conducted feasibility studies or have started construction process [at the mining sites], from entering the production stage.”

In fact, Bambang said the government would have to increase the country’s coal production to boost its non-tax state revenues (PNBP)

As of Wednesday, the PNBP from the mineral and coal sector reached Rp 39 trillion ($2.73 billion), already surpassing the full-year target of Rp 32.7 trillion.

Indonesia had coal resources amounting to 128.06 billion tons and coal reserves of 28.46 billion tons by the end of 2016, located mostly in Kalimantan and Sumatra. (bbn)