Indo eyes coal curbs

Indonesia is reported to be considering restricting exports of another major commodity – this time its coal.

The world’s largest exporter of thermal coal currently exports around 70% of its coal production, much of it to China and India.

But the government says output must be capped as domestic demand for the power station fuel is expected to rise by 13% this year and next, reports Reuters.

“We expect the coal export regulation together with an amendment of the tin export regulation to be issued in early July, before the presidential election,” a Trade Ministry spokesman is quoted as saying.

But many of Indonesia’s biggest coal mines are said to be owned by politically connected figures, and with presidential elections fast approaching in July the government may face difficulties imposing new rules on the sector, says Reuters.

Latest trade data from Bank Indonesia reveal year-on-year declines in coal exports from Indonesia, according to shipbroker SSY.

The Southeast Asian country exported 35.7mt of coal, including lignite, in April 2014, down 2.7mt month-on-month.

This compares with exports of 37.1mt in April 2013. The January-April export total is 139.2mt, down 3.4mt on the same period of 2013.

An Indonesian law banning the export of unprocessed minerals, specifically nickel ore and bauxite, took effect on 12 January this year.

It is mandated by a Mining Law passed by Indonesia’s parliament in 2009 which says mineral ores must be processed at domestic smelters.

Indonesia’s Ministry for Mines and Energy have proposed a three-year exemption that would allow companies to export unprocessed minerals until 2017 provided they make a commitment to build domestic smelters.

Indonesian nickel ore exports are estimated to be about 60mtpa, with bauxite exports at a similar level, according to Ben Nolan, an analyst at US-based investment house Stifel.

Japan is reported to be considering taking Indonesia to the World Trade Organisation (WTO) over its ban on ore exports.