Shift in China's Market Opens Opportunities for Indonesian Coal: Gov't Officials

China is in desperate need of low-sulfur coal produced by Indonesian miners to replace its high sulfur coal from local mines that contributes to the country's chronic air pollution, a government official at the Indonesian Embassy in Beijing said. (JG Photo/Yudha Baskoro)

By : Sarah Yuniarni | on 2:17 PM November 15, 2017
Category : Business, Commodities

Jakarta. China is in desperate need of low-sulfur coal produced by Indonesian miners to replace its high sulfur coal from local mines that contributes to the country's chronic air pollution, a government official at the Indonesian Embassy in Beijing said.

While China has the largest hydropower, wind power and solar power capacity in the world, half of its power generation still relies on coal. And the Chinese government has  been making efforts in recent years to limit pollution that coal burning plants produce, including by sourcing for cleaner-burning coal.

"The quality of our coal is number one in China," Dandy Satria Iswara, a trade attaché at Indonesian Embassy in Beijing, said in a statement on Monday (13/11).

He said Indonesia generally produces low-sulfur coal that has less emissions than coal produced by its main competitors, including China and Australia.

Coal exports from Indonesia to China in the first nine months this year amounted to $1.68 billion, a 63 percent increase compared to the same period last year.

Indonesia showcased its coal products at the 17th China Coal and Mining Expo (CCME) event held by the China National Coal Association on Oct. 25-28 in Beijing, which according to some Indonesian participants managed to draw interest from Chinese counterparts.

The event, which is held every two years, was attended by nearly 400 companies from 18 countries, including from the United States, Russia and Germany.

"We hope our presence will open the door of even greater opportunities to enter international markets so it can have a bigger impact on the Indonesian economy," said miner Borneo Pacific Global chief executive Rendy Halim.

Borneo Pacific began exporting coal to China in 2015, with an initial volume of around 100,000 tons. A year later, Borneo's coal exports to China grew by 180 percent. By the end of this year, the company projected that its export to China will expand by about 310 percent.

"Our company is trying to make industrial consumers, power-related companies and investors in the mining and energy sectors from China better understand the regulation and business climate of Indonesia's mining sector," Rendy said.

China is the main export destination for Borneo, which receives 55 percent of the company's total coal export volume. Borneo also exports its coal to India, Vietnam, Philippines, Thailand, South Korea and Bangladesh.

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