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Indonesia plans 14 coal terminals in bid to curb illegal exports

Highlights

Indonesia, the world's largest exporter of thermal coal, plans to build 14 dedicated coal terminals in the islands of Kalimantan and Sumatra in a bid to curb illegal coal exports, a government official said Monday.

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Around 50 million-60 million mt/year of coal is exported illegally from Indonesia, depriving the government of revenue from royalties of 3-13.5% imposed on coal produced in the country, the Minerals and Coal Director of Indonesia's Ministry of Energy, R. Sukhyar, told delegates at the Coaltrans Asia conference in Bali Monday.

Indonesia currently more than 20 terminals that handle coal exports, but the government has no control over existing private ports. Sukhyar said seven terminals were planned for Kalimantan and seven for Sumatra in a bid to ensure all coal produced on both islands was recorded and subject to royalty payments.

The energy ministry's Coal Director Edi Prasodjo told Platts on the sidelines of the conference that a conceptual plan to build the terminals had been drawn up, and the country's transport ministry would be in charge of implementing it.


Both the government and the private sector would be involved in construction, he added, without elaborating.

Coal market participants were divided over the feasibility of the plan. A source at a small-scale Indonesian coal producer with mines in both Kalimantan and Sumatra labeled it unrealistic, saying the investment required would be too great.

He added Indonesia already had several private coal terminals that could accommodate barges to Capesize vessels and building more terminals may not solve the problem of illegal mining.

A source at a major Indonesian coal producer said the plan was a good idea, but added new terminals would not be required if the government was able to curb illegal coal mining using the infrastructure already in place.

Prasodjo said Indonesia was expected to produce 426 million mt of coal in 2014, in line with 2013, and had produced 140 million mt in the first quarter.

--Cecilia Quiambao, cecilia.quiambao@platts.com
--Edited by Wendy Wells, wendy.wells@platts.com