New restrictions on overseas sales are possible in either April or August -- when mine output is typically lower -- to make sure local power plants have sufficient supply, according to Pandu Sjahrir, chairman of the Indonesian Coal Mining Association.
“There is potential for a disruption like what happened in January,” Sjahrir said in an interview Tuesday. “We just assume they’re going to stop exports again.”
Power plants can face supply shortages in periods of the year when coal output is crimped by factors including heavy rain, Sjahrir said. April is usually a low month for production, and this year it coincides with Ramadan, potentially further hampering output.
Indonesia requires coal producers to supply at least 25% of output to meet local needs and sets a ceiling price for coal sold to local power plants at $70 per ton, a policy known as the domestic market obligation rule.
The higher international coal prices rise, the more likely local miners are to sell the remainder of their output overseas, which will increase the chance of another export disruption, Sjahrir
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