Operations halted at Indonesia's MHU coal mine after accident: sources

Indonesian coal miner PT Multi Harapan Utama, or MHU, has halted operations at its mine located in East Kalimantan province after an accident, multiple sources told S&P Global Commodity Insights Sept. 13.

The company did not respond to a request for comment.

MHU produces 4,600 kcal/kg, 5,500 kcal/kg and 6,200 kcal/kg GAR grades of coal, with total sulfur of 0.80% and an ash content of 6% on an air-dried basis, according to the company website. MHU produces around 8 million-10 million mt/year of coal, according to two traders based in Singapore and Indonesia.

The company has not announced force majeure, multiple sources said.

The Indonesia-based trader said an investigation into the accident has begun, and loading and shipping operations from the mine have been suspended while the company awaits its outcome.

Sources said they expect any disruption to be shortlived.

Most of MHU's coal, excluding the mandatory 25% domestic market obligation requirement, is sold to end users in South Korea, India, China, Bangladesh, Vietnam, the Philippines, Myanmar, Cambodia, Malaysia, Thailand and other countries, the company said on its website.

The Asian thermal coal market has started to see renewed demand for coal with lower calorific value, primarily from India, where demand is spiking as the festive season approaches. While low-CV producers stuck to their higher offers, stranded by persistent pressure on their operational margins, bid levels were seen edging higher than previous weeks.

Chinese power plants were also heard to be procuring low-CV coal from the spot market to replenish stocks for the upcoming winter season. Rising domestic prices in China also contributed to elevated interest from buyers to import from the spot market.