July 4, 2020 Read More →

Indonesian miners agree to cut domestic production by 50 million tons

The Jakarta Post:

Miners in Indonesia, the world’s top coal exporting country, have decided to cut domestic production by 50 million tons this year in their bid to increase global coal prices, which have been falling during the health crisis.

The Indonesian Coal Mining Association (APBI) has forecast coal production to fall short by 11 percent to 530 million metric tons this year. However, members are planning to further lower production to 480 million tons due to weak prices, the APBI announced on Wednesday.

Indonesia’s benchmark coal price (HBA) hit US$52,98 per ton in June, the lowest price in the last four years, according to Energy and Mineral Resources Ministry data. “We see at least three to five years before a recovery of all the major markets occurs,” Dickson said. 

A recent report calculated that only six of 11 big coal companies in Indonesia can remain profitable given that coal prices have lingered at around $50 per ton in 2020.

The unprofitable or “cash flow negative” companies are PT Bumi Resources, PT ABM Investama, PT Bukit Asam, PT Toba Bara Sejahtra and PT Harum Energy and Geo Energy Resources Ltd, according to the report by the Institute for Energy Economics and Finance Analysis (IEEFA).

However, PT Bumi Resources, Indonesia’s most productive coal miner, did not plan to cut production levels, said Bumi corporate secretary Dileep Srivastava.

[Norman Harsono]

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