The Ministry of Industry and Trade recommends that Vietnamese coal importers need to urgently contact Indonesian coal export partners to find solutions for orders delivered in January.
On December 31, 2021, the Indonesian Ministry of Energy and Minerals announced a temporary ban on coal exports in January for all coal mining and trading enterprises with licenses: IUP (Business mining-Mining Business License); IUPK (Production Operation Special Mining Business License) and PKP2B (Concession Agreement).
According to the Ministry of Energy and Minerals, the temporary ban on exports is to ensure the supply of raw coal for Indonesia’s coal power plants, to prevent the risk of power shortage for production and daily life in this country, and to force businesses to Coal production and trading enterprises must fulfill the obligation to supply 25% of the total amount of exported coal to the domestic market.
According to the Ministry’s data, as of January 1, 2021, out of a total of 5.1 million tons of coal, coal enterprises are obliged to supply the domestic market according to the Government’s regulations. there are 35,000 tons of coal supplied by these coal enterprises.
This, will cause the risk of serious power shortage, on a large scale with nearly 20 power plants with a total capacity of 10,850 MW that will have to be shut down due to lack of raw materials.
The Indonesian government said that when the domestic coal supply is fully met, coal producers will be able to resume export business.
The Ministry of Industry and Trade recommends that Vietnamese coal importers need to urgently contact Indonesian coal export partners to find solutions for orders delivered in January.
At the same time, it is necessary to closely monitor updates on policies, management and administration related to coal at the website of the Ministry of Energy and Minerals of Indonesia – or through the Vietnam Trade Office in Indonesia.
However, it is likely that the Indonesian Government will soon have to consider and adjust this decision due to pressure from the Indonesian coal production and trading business community.
The Government’s announcement to suspend the ban on coal exports was completely unexpected to the Indonesian coal production and export business community.
The Association of Indonesian Coal Business and Production Enterprises said that this was a hasty and unexpected decision without any consultation with the Indonesian coal business community and requested the Ministry of Energy and Minerals. Indonesian production withdrew this decision to ban coal exports.
The Indonesian Chamber of Commerce and Industry also expressed the view that the Indonesian Government’s decision is too hasty and biased and needs to be coordinated with the business community.
“Businesses have an important role in the economic recovery of the country, any government policy will have an impact on the business community and the economy. Therefore, the policy of banning coal exports need to discuss with the business community,” said the Indonesian Chamber of Commerce and Industry.
According to data from the Indonesian Ministry of Energy and Mineral Resources, as of December 17, 2021, Indonesia’s total coal production reached more than 581 million tons, reaching 93% of the mining plan target set for 2021. 625 million tons.
Indonesia’s coal production as of December 17, 2021 has surpassed the total production of 2020 (565.7 million tons). The amount of coal exported by this country to December 17, 2021 reached 282.7 million tons. Coal output supplied to the domestic market is 188.38 million tons. Coal production not yet marketed (export and domestic) is 110.1 million tons.
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