Indonesian miners are calling for exemptions from the export ban as costs rise



mIners face a growing risk of demurrage and penalties

Discussion with the government is ongoing

No boat permit from Thursday, says officials

Adds comment from Minister and Coal Mining Association, Force Majeure details

JAKARTA, January 6 (Reuters)Major Indonesian miners have sought exemptions from a coal export ban imposed earlier this year as the cost of stranding numerous ships offshore continues to rise.

The world’s largest exporter of steam coal introduced the ban to avoid domestic power outages.

The Indonesian government had promised to begin a review of the ban on Wednesday, but talks have been postponed and Energy Department officials said Thursday it was unclear when they could decide to end the ban.

An official with the Indonesian Coal Miners Association said Thursday that discussions were ongoing.

The ban drove coal prices higher in China and Australia this week as around 100 ships supposed to carry a total of 5.9 million tons of coal exports have accumulated off Kalimantan, home of Indonesia’s main coal ports, Refinitive data shows .

Bumi resources BUMI.JK, Indonesia’s largest coal miner, said in a filing on the stock exchange that while the company was still analyzing the financial impact of the export ban, it could result in demurrage and penalties due to delivery delays.

“The company hopes the government will promptly lift the export ban imposed on companies that have complied with their commitments in domestic markets,” said Bumi.

Indonesian miners have to sell 25% of their production to domestic power plants at a maximum price of $ 70 per tonne.

Adaro Minerals Indonesia ADMR.JK, a unit of Indonesia’s second largest coal mining company Adaro Energy ADRO.JK, said in a statement that it has applied to export metallurgical coal, which is used in steelmaking rather than electricity.

Indica energy INDY.JK said it would have to adjust its production volumes lower if the ban persists.

Indo Tambangraya Megah ITMG.JKMeanwhile, director Yulius Gozali said in an email that he had declared force majeure because of the export ban.

Coal contributes around $ 3 billion a month to Indonesia’s international trade and helped propel exports from Southeast Asia’s largest economy to record highs last year.

Indonesia’s rupiah IDR = has fallen by around 1% since the ban and was also unsettled by a restrictive US Federal Reserve.

Japan, which imports 2 million tons of Indonesian coal a month, sent a letter to the Indonesian energy minister calling for the ban on high-calorific coal to be lifted and for five loaded ships to be granted exit permits for Japan.

An Indian government official told Reuters that his country had not yet contacted the Indonesian authorities after reassurance that domestic coal supplies were sufficient.

“We are watching closely. But at the moment we are in a comfortable position,” said the official.

As of Thursday, Indonesia had not issued any exit permits for coal freighters, said Mugen Suprihatin Sartoto, an official with the Ministry of Transport.

The Asian economic centers of China, India, Japan and South Korea together received 73% of Indonesia’s coal exports in 2021, according to Kpler ship tracking data.

State Enterprise Minister Erick Thohir said Thursday that state utility PLN had secured enough coal pledges but wanted PLN to have a stable long-term existence.

On Wednesday, PLN announced it had secured 13.9 million tons of coal, but it took 20 million tons to reach a safe 20-day inventory.

Overload of coal ships off Indonesia after coal export ban

(Reporting by Fransiska Nangoy, Bernadette Christina Munthe and Sudharshan Varadhan Editing by Ed Davies, Tom Hogue and David Goodman)

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