Thursday, June 1, 2023

EU Ban on Russian Coal Drives Growth in Indonesian Mining Sector

Jayanty Nada Shofa
August 5, 2022 | 4:44 pm
Coal-carrying barges cross the Musi River, Palembang, South Sumatra on Jan. 15, 2020. (Antara Photo/Nova Wahyudi)
Coal-carrying barges cross the Musi River, Palembang, South Sumatra on Jan. 15, 2020. (Antara Photo/Nova Wahyudi)

Jakarta. Indonesia's mining sector expanded 4.01 percent in the second quarter of 2022, a growth which the Central Statistics Agency or BPS attributed to, among other things, the rising foreign demand for coal amid Europe’s decision to ban Russian imports of the combustible black rock.

In April, the European Commission agreed to impose a full ban on all forms of Russian coal following its invasion of Ukraine. The ban will take effect on Aug. 10, adding the prospect of even higher demands.

BPS announced that Indonesia's mining sector rose 4.01 percent in April-June 2022. This is slightly higher than the 3.82 percent growth rate in the first quarter of this year. 

"Indonesia's coal mining grew 4.25 percent as foreign demand rose, especially when Europe decided to ban Russian coal due to the Russia-Ukraine conflict,” BPS head Margo Yuwono told a press briefing on Friday.


“This has created a new market for us,” Margo added.

Indonesia's metal ore mining also enjoyed a 22.37 percent growth thanks to an increase in copper and gold production. 

BPS reported the resource-rich country’s economy expanded 5.44 percent in the second quarter. Mining accounted for 13.06 percent of Indonesia's economic growth.

Key commodity price hikes also drove Indonesia’s exports, which surged 19.74 percent in the second quarter, compared to the same period last year.

"Global supply chain disruptions have an impact on the rising prices of Indonesia's leading commodities and provided a windfall on exports," Margo told the conference.

Indonesia recorded a trade surplus of $15.55 billion in the second quarter of 2022, registering a whopping 148.01 percent year-on-year growth. Indonesia’s trade surplus soared 67.85 percent in the second quarter from the preceding three-month period.

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