Coal is one of Indonesia's main exports and sources of state revenue. (ID Photo/David Gita Roza)

Indonesia Will Exceed Coal Production Cap Again Next Year

BY : RANGGA PRAKOSO

DECEMBER 28, 2017

Jakarta. Indonesia's coal production may keep increasing next year with new miners set to start operations, undermining the government's energy security plan.

The Ministry of Energy and Mineral Resources estimates coal production next year can exceed this year's 477 million ton target, the director general of minerals and coal at the ministry, Bambang Gatot, said on Thursday (28/12).

The figure diverges from Indonesia's medium-term plan, known as RPJMN, which seeks to reduce the coal production to 406 million tons in 2018, and to 400 million tons in 2019, in an effort keep coal reserves for energy security. Reducing coal production was also part of the country's commitment to mitigate climate change.

Today, there are about 2,000 mining permit holders who have just completed feasibility studies or construction of their facilities and are ready to start production, Bambang said.

"Can we revoke these permits to stop the production? Or tell the miners to suspend their operations and take a break? It's just impossible," he said.

Bambang said the ministry has submitted a letter to the National Development Planning Agency (Bappenas) to request it to reconsider the country's production plan.

Indonesia already missed its target to reduce coal production to below 413 million tons this year. About a fourth of the production is consumed domestically, while the rest is sold mainly to China and India.

To address the problem, the ministry will be more vigilant in reviewing environmental aspects of coal mining next year, and can impose production limits on miners.

"If the environment cannot support their production capacity, we will not allow them to [force it]," Bambang said.

Coal is one of Indonesia's main exports and sources of state revenue. According to the ministry's data, the government collected Rp 39 trillion ($2.7 billion) from coal mining royalties this year, exceeding its initial target of Rp 32.7 trillion.

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