Concerns over coal supplies

Concerns over coal supplies
Published: 16 March 2004

Rising demand for coal in international market has sparked fears that Indonesian exports will rise at the expense of supply to the domestic cement industry.  The concern is greater with China’s decision to ban coal exports and increase imports of that commodity.  Cement factories have asked the government for guarantee in domestic supply and if necessary follow the Chinese lead in banning exports, a senior official of the energy and mineral resource ministry said yesterday.

Most cement factories in the country use coal for fuel instead of oil to follow the government’s call to economize on oil.  Mineral and Coal Director Mahyudin Lubis said the government will discuss that matter with cement producers later this week.  Lubis, however, said there was no cause for concern as the country’s coal production has increased from year to year.  Indonesia’s coal production totaled 112Mt in 2003 and it is projected to rise to 135Mt in 2004.  Consumption by the cement industry averages only 4.7 million tons a year. Lubis, therefore, suggested that to ensure supply, cement factories should start buying coal on long term contracts.