Domestic Coal Carriers Will Be Benefited from the Increasing Domestic Consumption

Domestic consumption of coal this year (2020) is expected to reach 155 million tons, up more than 12% year on year, from 138 million tons last year, according to Ministry of Energy and Mineral.

Minister of Energy and Mineral Arifin Tasrif said the increase would be triggered by the increasing consumption of power plants, smelters and steel factories, and additional demand from up to eight new mineral smelters.

However, the production is predictably to decrease. Indonesian coal miners Bumi Resources, Adaro Energy, Tambang Batubara Bukit Asam and their smaller peers are expected to produce a total of 550 million tons of coals, down 9.8 percent from last year’s 610 million tons. The lower projection is due to the miners exceeding last year’s production quota of 489 million tons.

Arifin said additional demand from the smelters would account for some of the increase in coal consumption this year. The minister said the government expected eight new mineral smelters to start operation this year. Last year, 17 new mineral smelters were opened.

“We will continue to build new smelters, creating a multiplier effect to improve people’s lives,” Arifin said.

Arifin said the government would also intensify monitoring of smelter construction as mandated by a 2017 government regulation on mineral and coal mining.

Some contacted sources from domestic coal carriers expressed happiness to such market potency, saying the increase consumption will potentially trigger the market potency to carriers currently carrying and shipping coal for domestic consumption.

“Of course it is a good news. Hopefully, the national carriers will take the market and any national carriers have similar access to catch the market,” a source from a national shipping line told Indonesia Shipping Gazette, but refused to mention his name.

“National shipping lines or carriers that handle domestic shipment must get benefit from this market growth,” he said.

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