Indonesian miners will dig out 485 million metric tons of coal at the most in 2018, up 5 percent from last year, according to a projection from the Ministry of Energy and Mineral Resources. (Reuters Photo/Kacper Pempel)
By Adinda Putri on 11:47 am Jan 12, 2018
Category Business , Commodities
Jakarta. Indonesian miners will dig out 485 million metric tons of coal at the most in 2018, up 5 percent from last year, according to a projection from the Ministry of Energy and Mineral Resources.
This year's projection is a wide deviation from the country's target to reign in coal production to preserve resources and mitigate climate change. Indonesia’s medium-term development plan (RPJMN) for 2015-2019 dictates that the country produce only 406 million tons of coal.
Many domestic miners are only now starting to extract coal as they have waited years to receive production licenses, only recently granted, said Bambang Gatot Ariyono, the ministry's director general of minerals and coal.
There are currently around 2,500 mining permit holders who have just completed feasibility studies or construction of their facilities and are ready to start production, he added.
Last year, miners produced 461 million metric tons of coal. While lower than the 477 million tons projected in the ministry's initial estimation, the amount of coal produced in 2017 was higher than the 413 million ton cap lined out by the RPJMN.
Still, the government has yet to give up efforts to limit coal production.
"The government controls [the overall production] by not arbitrarily giving permits for companies to increase yields," Bambang said.
While the country estimates that it has 28 billion tons of coal reserves, only about 25 percent of all coal produced is used domestically; the rest is exported to markets abroad like China and India.
The country plans to generate 33 percent of its total energy supply from coal by 2025, up from 30 percent today.
On the other hand, local power plants have been slow to absorb coal from miners. Domestic coal consumption only reached 97 million tons in 2017 from a projection of 121 million tons.
The weak domestic consumption of coal, according to Bambang, was in large part due to the failure of steam power plants to meet their operational targets last year.
Construction of coal-fired power plant projects is intended to support President Joko "Jokowi" Widodo's target of producing 35,000 extra megawatts of power. However, state-controlled utility company Perusahaan Listrik Indonesia has found it difficult to fund the $140 billion project. Environmental organization Greenpeace Indonesia has also protested the continuity of the project.
Under the government's RPJMN, coal production is expected to reach 400 million metric tons in 2019, 60 percent of which will be consumed domestically.