Indonesia relaxes export ban to allow 37 coal vessels to depart

By Reuters   January 12, 2022 | 06:00 pm PT
Indonesia relaxes export ban to allow 37 coal vessels to depart
Coal barges are pictured as they queue to be pulled along Mahakam river in Samarinda, East Kalimantan province, Indonesia, August 31, 2019. Photo by Reuters/Willy Kurniawan
Indonesia, the world's biggest thermal coal exporter, has allowed 37 loaded coal vessels to depart after they secured approvals from authorities, the Coordinating Ministry of Maritime and Investment Affairs said on Thursday.

In a statement, the ministry said an export ban implemented on Jan. 1 had been eased for miners that had met a requirement to sell a portion of their output for local power generation after the state utility procured enough coal at power stations to ensure 15 days of operations.

"I request that this is supervised closely so this also become a moment for us to improve domestic governance," Luhut Pandjaitan, coordinating minister for Maritime and Investment Affairs, said in the statement.

Sending shockwaves through global energy markets, Indonesia set the export ban after state power company, Perusahaan Listrik Negara (PLN), reported critically low coal stocks at power plants that left Indonesia on the brink of widespread power outages.

Indonesian authorities blamed the coal supply crisis on miners failing to meet a so-called Domestic Market Obligation (DMO), requiring them to sell 25 percent of output to local buyers with a price cap at $70 per tonne for power plants.

The government has been lobbied by coal miners and also some of its biggest buyers including Japan and South Korea to ease the export ban.

There were about 120 vessels either loading or waiting to load off Indonesian's coal ports in Kalimantan on the island of Borneo on Wednesday, according to Refinitiv Eikon data.

The ministry said in the statement on Thursday that mining companies that had met their sales contract with PLN and 100 percent of their DMO requirements for 2021 would now be allowed to begin exporting.

Miners that had not fulfilled their PLN contracts and DMO would face fines, it said.

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