Indonesia's higher coal output target thwarted by heavy rains

The country's second-largest coal miner Adaro Energy said it has kept its output target of between 52 million to 54 million tonnes, spokesperson Febriati Nadira said. Adaro produced 54.5 million tonnes in 2020.

"We are optimistic in the prospect of coal business in this second semester but we remain cautious," she said.

DOMESTIC OBLIGATION

In addition to rains, miners have also faced stricter enforcement of so-called domestic market obligations (DMO) that guarantee sufficient coal for local power generators.

The obligations state that miners must sell 25% of their output to state electricity firm Perusahaan Listrik Negara (PLN)and 34 miners who missed that target had their export permits suspended earlier this year.

Some have been allowed to resume exports since, but the DMOs remain a key priority for most miners.

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"Our commitment is to meet DMO and prioritise supplies against PLN contracts," Bumi's Srivastava said.

Indika Energy, parent company of miner Kideco Jaya Agung, submitted revised output targets in August and has been allowed to produce 37.3 million tonnes of coal this year, up from an initial target of 31.4 million tonnes, spokesperson Ricky Fernando said.

State miner Bukit Asam, located mainly on Sumatra, received a more modest increase in its output quota, to 30 million tonnes from its earlier plan of 29.5 million tonnes.

Around 54% of its total sales were to domestic customers last year.

Indonesia's trade surplus hit record highs in recent months, thanks in part to the surge in coal prices.