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Indonesia has progressed in the past 12 years from exporting a paltry 20m tonnes of coal in 2000, to become the world largest exporter of Coal. Australia was until 2012 1st and China 2nd.
Indonesian coal has become more attractive to international buyers as the price is much lower than Australian coal, and the costs for shipping and time required to ship are much lower.
Known coal deposits of over 35 billion tonnes of thermal coal and coking exist and exploration continues to find more.
Coming off a low export base Indonesian exports have risen over the past 10 years from 40 mtpa to 114 mtpa in 2011 and this continues to rise. 2012 was over 200 mtpa. The number of active mines in Indonesia has grown massively in the past 10 years from 40 mines to over 100, with many Australian companies seeking to mine and export coal.
India has traditionally been the largest buyer of Indonesian coal, but were surpassed recently by China. Korea and Vietnam are also large buyers of Indonesian Coal.
Indonesian rules for export state that a percentage of all coal mined must be sold to the domestic market. Domestic Market Obligations.
Bulk export infrastructure is lacking with little rail infrastructure and due to the geography of the region many shallow rivers with few deep water ports. The rivers have proved both a help and a hazard. The rivers have assisted many companies to load the coal onto barges, which can be taken to deep water and then transferred to other vessels or in some cases the barge is taken directly to other customers in Malaysia and Vietnam.
This also had hindered large scale high volume export as the coal must be transshipped and handled multiple times. Coal is often loaded on trucks then taken to a river, shipped by barge to a waiting ship out at sea and then craned onto the ship. To fill a panamax 200,000 tonne ship could take 2-3 days whereas a deep water port with specialized loading facilities could load the ship in under 24 hours.
There have great improvements in transshipping though which improve loading rates. Additionally there is strong interest in building deepwater port facilities and rail lines to transfer the coal.
MEC Coal are looking to build a heavy haul rail line to transport coal and there is another Russian based conglomerate looking to build rail.
There are many different deepwater bulk port facilities proposed.
Indonesia have recently passed new laws which limit foreign ownership of new mines to 49%. These laws announced 9th March 2012, but passed over a month before, have left current mine ownership in question with conflicting reports by different ministers on the impacts for current ownership structures. Major changes to mining legislation, ownership and operation of both existing and new mines. Whilst the laws have been passed there has been little further action and many international mining companies are unaware of what impact these will have or if they will be imposed.
Kalimantan Coal 2013 will analyse developments within the Indonesian coal legislation, regional issues, business opportunities and advances in coal markets while simultaneously addressing issues such as infrastructure, land use agreements and environmental impact assessments. Find out more about the conference here.
