Demand for coal to feed the emerging economies of China and India continues to grow and Indonesia is playing a major role in filling these needs.
While coal is important in a number of areas of economic growth in China and India, Indonesia’s exports are particularly important in the area of power generation.
In fact, Indonesia is the world’s largest exporter of coal for power generation while Australia’s coal is primarily used for steel industry markets.
Coal is the primary feed source for power generation in China, India and a number of other Asian countries. For power plants in China and India importing coal from Indonesia is cheaper than supplying it domestically.
Although alternative energy sources are actively being sought by most countries, the   International Energy Agency predicts that global demand for coal will grow 1.9% annually up to 2015.
Indonesia’s massive coal resources are likely to fill much of the increase in demand and this has been recognized with Indonesian enterprizes expanding operations and foreign investors taking keen interest in this process.
In September 2009, China Investment Corp (CIC) made a loan of US$1.9 billion to Bumi Resources, Indonesia’s largest mining company which plans to increase production this year to 100 million tonnes
Recapital is aiming to acquire Berau Coal, the country’s fifth largest miner, while Banpu Group, a Thai energy company with mining operations in Indonesia and China, is also considering acquisition.
One factor that will have an impact on the current ‘black’ tide is when coal consumers are required to pay for their carbon emissions as part of global initiatives to tackle climate change. Talks on this topic are being held in all environmental forums around the world.