If implemented, the China`s plan to ban the imports may cut thermal coal imports into the country by nearly a third, and Indonesia is feared to be most at risk because it is one of China`s largest coal suppliers.
According to The Wall Street Journal report, China in the first three months of 2013 imported 5.6 million metric tons of low-grade coal, accounting for 28 percent of total thermal coal imports, most of which came from Indonesia.
But Energy and Mineral Resources Minister Jero Wacik has said Indonesia was not worried about China`s plan to ban import of low-rank coal.
"We can still find alternative markets other than China such as India, South Korea and others. ," Jero Wacik said when opening the 19th CoalTrans Asia conference in Nusa Dua, Bali, on Monday.
The energy minister stated that if the demand for coal exports decreased, Indonesia could increase domestic absorption.
He said it was China`s right to do so and every country has its own policy.
Besides seeking other markets, the minister said Indonesia could also increase its domestic market in exchange for the Chinese market.
"So, Indonesia need not worry about it and until now national coal markets have not yet been affected," he said adding national coal production this year is expected to reach 391 million tons.
Jero Wacik nonetheless had called on coal producers not to be discouraged by the development and to continue to boost the country`s economic growth.
So, although the price of coal is down, producers must not only keep complaining but must work in cooperation with the government to increase coal contribution to national energy, he said.
Coal contribution is expected to rise from 24.5 percent to 33 percent by 2025 based on the national energy policy while the role of oil will be down from 49.7 percent to 20 percent.
Citing a low demand in the global market, the energy and mineral resources minister said the government was planning to reduce coal production.
Speaking after a golf tournament for Jero Wacik Cup at Tabanan district in Bali on Sunday, the minister said: " "We will discuss the plan further since China which is the largest coal consumer has imposed a ban on imported coal."
China also has begun mining coal from its mining areas with a production capacity of 750 million tons a year, he said.
"In addition, a number of European countries also have reduced their coal imports because of the current economic crisis," he said.
To deal with the low demand for coal, Jero Wacik said the government was seeking to build more thermal power plants with a combined capacity of 2,000 megawatts to meet power demand from several areas in the country.
"We have abundant coal reserves. So the coal production will not depend on foreign demand but will be used to meet domestic needs," he noted.
Meanwhile, Executive Director of the Indonesian Association of Coal Producers (APBI) Supriatna Suhala said the country`s coal production was predicted to reach 400 million tons in 2013, overshooting the target of 390 million tons.
Demand for coal on the domestic and international markets remain stable despite report of import cut by China, Executive Director of The Indonesian Association of Coal Producers (APBI) Supriatna Suhala said.
Speaking at Coal Trans Asia Conference in Nusa Dua, Bali, on Monday, Supriatna said the market of low rank coal remained stable with growing demand from coal fired power plants offsetting import cut by China.
He said growing demand for coal especially for low calorie coal has boosted production.
It is obvious from the production in the first three months of this year reaching 95 million tons, he pointed out.
"Seeing the trend we believe the production target of 390 million tons would be exceeded," he went on.
Last year, the country`s coal production totaled 386 million tons, and 75 million of the production was for domestic market with the rest exported.
In 2013, the domestic requirement is expected to rise to 80 million tons, Supriatna said.
He said the Chinese ban on imports of low rank coal will certainly had impact on the market as China is a major market for Indonesia`s coal.
Indonesia has exported 90 million tons of coal to China per year.
But he said, however, that he believed Indonesia would not find much difficulty in disposing of its coal production.
Exports could be directed to India, Sri Lanka, Pakistan and other ASEAN countries, he said.
He said demand for coal in developing economies would continue to climb to feed coal-fired power plants.
India is building coal-fired power plants up to 100,000 megawatts in capacity, he cited saying India, therefore, would need to import coal estimated to reach 150,000 tons per year.
"Therefore, I am optimistic the market demand for coal would remain strong and continue to grow in the next 10 years," he said.
(O001/F001)
Reporter: Otniel Tamindael
Editor: Jafar M Sidik
Copyright © ANTARA 2013
