Indonesia plans to improve quality of coal exports

The Indonesian Government has announced it intends to ban exports of low-quality coal, starting in 2014. Coal with an energy value of less than 5600 kCal/kg will no longer be exported, according to Witoro Soelarno, secretary to the director general of coals and minerals at the Ministry of Energy and Mineral Resources.

Soelarno said in a statement that the Government “will release regulations later [in 2011] aimed at increasing the value added of Indonesian coal exports”. Under the plans, coal companies will have to upgrade the heating value of low-rank coal if they seek to export it. This will enable them to charge higher prices. The country has a growth target of 6.6%, and this potential boost to export revenues may assist in meeting this target. Indonesia aims to increase exports by 12% to US$ 168 billion/year.

Low quality coal (under 5600 kCal/kg) is currently priced between US$ 56.64 – US$ 85.08/t, compared to US$ 112.40/t for coal with a calorific value of 6322 kCal/kg.

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