Indonesia may cap coal

Indonesia may cap coal

Indonesia might limit coal production to 400 million tonnes per annum and
prioritise the usage of output for domestic customers, according to VTB
Capital.

The investment management group said Indonesia's Ministry of Energy and
Mineral Resources planned to issue a decree on this by 2019.

Last year, Indonesia's coal production totalled 434Mt, with domestic
consumption accounting for less than a quarter.

Figures from the Indonesian Coal Mining Association show the country's
production and export totals have reduced in the past two years while
domestic consumption has gradually increased.

VTB said preliminary data for 2017 showed a 9% year-on-year growth in coal
exports from the country, which implied a 31Mt higher annualised run-rate
than last year.

"Overall, we do not see any significant impact on market fundamentals in the
short and medium term from this limit (if implemented), as the effect of the
limit represents less than 1% of total global output and 3% of global
trade," VTB said.

"However, this might cap output growth in the country in the long run," VTB
said, adding this could be marginally positive for integrated coal miner and
steel manufacturer Evraz (LN:EVR) and Russian coal miner KTK.

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Link to Original Article:
http://www.mining-journal.com/commodities/coal/indonesia-may-cap-coal/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com