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Indonesia will likely continue to dominate the Asian coal
market at least until 2020, despite the government's policy of
directing more coal supplies to the domestic market, an analyst says.
In a report issued at an Asian coal conference held Tuesday in Jakarta,
British-based trade publisher and consultant to the international coal
business, McCloskey, said that with its massive coal reserves,
Indonesia would be the only coal producer that could fulfill the
expected surge in future coal demand in the region.
McCloskey director of finance and consultancy services Colin Gubbins
said that coal demand in Asia would continue to increase over the 13
years up to 2020 due to an increase in coal usage in most Asian
countries, including India, China, and South Korea.
India's coal imports were projected to increase by almost sixfold to 29
million tons this year from 5 million tons in 2006.
The opening of new power stations in South Korea would also drive
demand, which is expected to increase to 64 million tons this year from
only five million tons in 2006. Malaysia will also increase its imports
to 14 million tons in 2007 from 1.5 million tons the year before.
Gubbins said that another important factor that would strengthen
Indonesia's position as Asia's largest coal exporter, and which is
believed to have estimated coal deposits of around 63 billion tons, was
the fact that China, also one of world's major coal producers, would
further cut its coal exports.
China, he said, would actually increase its coal imports to meet supply
shortages in the domestic market following the closure of many mines
and the reduction in coal supplies from Vietnam.
In order to be able to benefit from the opportunities, the Indonesian
government should strive to increase production by offering investors a
more attractive mining policy, he said.
Indonesia, the world's largest coal exporter, is expected to produce
183 million tons of coal this year, about 134 million tons of which
would be exported. Next year, production is projected to increase to
198 million tons, about 145 million of which will be exported.
Based on government estimates, total coal production will reach 320
million tons in 2020, 170 million tons of which will be allocated for
domestic use, while the remaining 150 million tons will be exported.
In 2025, coal production is expected to increase to 370 million tons,
of which about 220 million tons will be allocated for domestic use.
Bambang Setiawan, director for coal mining supervision at the Energy
and Mineral Resources Ministry, said that the increase in the
allocation of coal for the domestic market would not really affect the
country's coal export plan as the surge in local demand could be filled
by lower grade coal.
The opening of many coal-fired power plants currently being built or
planned under the government's fast-track program to provide an
additional 10,000 MW of power supply over three years was expected to
increase coal demand on the domestic market by 45 million tons, mostly
lower grade coal, by 2010, Bambang said.
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