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Indonesia seeks lower FY'20 coal output to prevent price slide

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Indonesia seeks lower FY'20 coal output to prevent price slide

To prevent a plunge in prices, the government of Indonesia set a cap on miners' coal production in 2020, Bloomberg News reported Jan. 9, citing Energy and Mineral Resources Minister Arifin Tasrif.

According to Tasrif, the government has set the production target at 550 million tonnes for this year, down by 9.8% from 610 million tonnes in 2019.

Tasrif said the government "doesn't want coal production to be too massive and drive prices lower and cause government revenue to drop."

Tasrif clarified that the government will implement the domestic market obligation, which requires miners to sell 25% of their output locally at a fixed price.

The report noted that coal prices in Indonesia plummeted 28% in 2019, tumbling for a third year, and thus affected the government's revenue and contributed to a widening trade deficit in the country which considers coal its top export earner.