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Indonesia plans to review 4,000 coal mines

Staff writer |
Jakarta plans to review local coal mines which do not have "clean and clear certification," and possibly consolidate the country's coal industry, the Indonesian mining and energy minister said.

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"There are more than 10,000 mines which are IUPs or Izin Usaha Pertambangan [producers who are not directly under the government], and nearly 40% of them do not have clean and clear certification," Sudirman Said said at the 21st Coaltrans Asia conference in Bali, Indonesia.

So around 4,000 mines mines will be reviewed and the way forward for them would be consolidation, he said.

Separately, Pandu Sjahrir, Chairman of Indonesian Coal Mining Association said that consolidation in Indonesia's mining industry would happen eventually, but he could not say when.

The minister said that although Indonesian thermal coal prices were on a decline, miners were still producing at relatively high levels.

"When prices are high, then you sell more. But here, there is a new anomaly of miners producing more when prices are falling," he said.

The minister said there has not been much focus on using renewable energy to generate power so far in Indonesia.

The focus would soon turn to developing renewable technologies to preserve the fossil fuel, he said.

By the end of the year Indonesian sub-bituminous coal production might see a drop of around 30 million mt, said Fabio Gabrieli of Mercuria Energy Trading.

Prices for Indonesian 5,900 kcal/kg GAR thermal coal for delivery within a 90-day window have shed 10.8% so far this year, slumping to $53/mt FOB Kalimantan on June 5, from $59.45/mt on January 2, according to Platts data.

Director general of minerals and coal from the ministry of energy and mineral resources, Bambang Gatot Ariyono, speaking at the same conference said that the government may impose a royalty tax on mines producing mid- to high-cv coal. But he added that this was still being discussed and no concrete decision had been taken yet.

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