Indonesia backpedals on coal production cap

Indonesia backpedals on coal production cap


Jakarta — It is unlikely that Indonesia will set a cap on coal production in the near future due to uncontrollable coal mining activities in the country, according to an official. The government initially planned to reduce domestic coal production from 419 million tons in 2016 to 413 million tons this year. The figure was expected to 406 million tons next year, before hovering at 400 million tons  a year starting in 2019. However, as of Wednesday (27/12), this year’s coal production had reached 477 million tons, already surpassing last year’s achievement of 434 million tons. “Indeed, we previously expected to produce only 406 million tons of coal in 2018,” the Energy and Mineral Resources Ministry’s  mineral and coal director general, Bambang Gatot Ariyono told reporters on Wednesday.  “But looking at the current condition it might be impossible for us to prevent all holders of coal  mining permits, particularly the ones that have conducted feasibility studies or have started construction process at the mining sites from entering production stage.”  In fact, Bambang said the government would have to increase the coal production to boost its non tax revenues (PNBP). As of Wednesday, the PNBP from the mineral and coal sector reached Rp 39 trillion (US$2.73 billion), already surpassing the full year target of Rp 32.7 trillion. Indonesia had coal resources amounting to 128.6 billion tons and coal reserves of 24.86 billion tons by the end of 2016, located mostly in Kalimantan and Sumatra.