Indonesia's Coal Production has Reached 700 million Tons

KONTAN.CO.ID-JAKARTA. The coal mining industry is productive this year. Before the year ends, national coal production has already exceeded the government's target, at least in early December 2023.

Data from Minerba One Map Indonesia (MODI) Ministry of Energy and Mineral Resources (ESDM) shows, national coal production reached 701.04 million tons on Sunday afternoon (3/12).

This figure is above the national coal production target for 2023 set by the government, which is 694.5 million tons. However, this target exceeds the coal production target in 2022 of 663 million tons.

The optimism for achieving the coal production target has been expressed by the Ministry of ESDM. The Secretary General of the Ministry of ESDM, Dadan Kusdiana, stated that the performance of the mining subsector, especially in terms of coal commodity production, is going well this year.

That's why, he is optimistic that the 2023 coal production target can be achieved.

"The performance of the mining sector is very good and positive for 2023," he said in a press release on Wednesday (29/11).

National coal production achievement until early December 2023 continues the trend of national production growth, at least in the last 3 years. Citing data from the Ministry of ESDM, national coal production during 2020-2022 consecutively was 565 million tons in 2020, 606 million tons (2021), and 685 million tons (2022).

In line with coal production, the realization of Non-Tax State Revenue (PNBP) from the Mineral and Coal subsector throughout 2023 also soared.

The Ministry of ESDM recorded, PNBP from the mining subsector skyrocketed with a realization of IDR 152.16 trillion from a target of IDR 85 trillion based on data as of November 27, 2023.

"PNBP from the mining subsector, added Dadan, mainly comes from an increase in production fees or coal royalties," explained Dadan in a written statement (29/11).

The Executive Director of the Indonesian Coal Mining Association (APBI), Hendra Sinadia, said that the high coal production this year was supported by demand and prices that are still relatively strong, even though the trend is declining compared to last year.

In addition, coal mining production activities are also supported by more favorable weather this year due to the El Nino phenomenon and also adequate heavy equipment capacity.

"The additional production comes from the revision of the 2023 RKAB (Work Plan and Budget) (to increase production)," he said when contacted by Kontan.co.id, Sunday (3/12).

Regarding the trend of increasing coal production, Hendra believes that this is due to the still vital role of coal in meeting domestic energy needs.

"The increase in production is driven by an increase in demand indicating that coal still has an important role as the cheapest (affordable) and most reliable energy source," said Hendra.

In line with Hendra's statement, the production of major coal players in the country indeed shows an increasing trend in 2023. Take PT Bumi Resources Tbk (BUMI) for example.

Company internal data shows, BUMI's coal production figure reached 56 million tons throughout January-September 2023, up about 5% compared to the realization of January-September 2022.

This year, BUMI is indeed targeting an increase in coal production compared to 2022.

"Our target for coal production in 2023 is 75 million - 80 million tons. In 2022, our coal production realization was 70 million tons," he told Kontan.co.id (3/12).

Director and Corporate Secretary of PT Bumi Resources Tbk (BUMI) Dileep Srivastava,

Energy Researcher at the Institute of Energy Economics and Financial Analysis (IEEFA), Putra Adhiguna, highlighted the trend of increasing domestic coal consumption. Citing data from the Ministry of ESDM, Putra stated that domestic coal needs in 2022 reached 193 million tons or 116% of the target set at 166 million tons.

"The difference of about 16% is much higher than the total volume difference in 2022, and it should be noted that the annual growth of domestic consumption is recorded at 30% more," said Putra when contacted by Kontan.co.id, Sunday (3/11).

In line with this, Putra questioned the target of reducing domestic emissions proclaimed by the government.

"The export goals to China and India are still strong even though there is a slight market shift, while in terms of energy transition the rapidly increasing domestic consumption is an indicator to question the target of reducing domestic emissions," said Putra.