Officials at the Energy and Mineral Resources Ministry in Indonesia have reportedly warned the country may not be able to meet the spiking demand for coal from the European Union countries seeking to increase stockpiles amid cuts on Russian imports.
According to the Jakarta Post, Spain, Italy and the Netherlands have all joined with Germany in examining alternative options to buy larger tonnages of coal. The Energy and Mineral Resources Ministry said Germany asked for around 150 million tonnes from Indonesia, though there was no formal agreement parallel to that request.
Indonesian coal shipments to Germany, Netherlands, Spain, Italy, Poland and Switzerland have increased significantly, the news outlet said, year-over-year versus the first five months of 2021, per Statistics Indonesia data.
Furthermore, India has approached Indonesia to acquire additional coal; it is already Indonesia’s second-largest coal export destination.
Energy and Mineral Resources Ministry special advisor Irwandy Arif expressed doubts that Indonesia could meet additional European demand, as many producers are reporting problems increasing production due to weather problems and issues obtaining mining equipment.
He told the paper, in fact, that producers only met 41% of their full-year output target by the end of May. This may lead to a whole-year shortfall.
“We can't necessarily increase our production all of a sudden. We can’t,” Irwandy told the paper 24 June, adding that the country was already increasing its shipments with the additional demand.
Indonesian Coal Mining Association (APBI) Executive Director Hendra Sinadia told Jakarta Post 29 June that the government had given a green light to boost production levels. Some miners are trying to do so, though without any guarantees.
“This is very positive for us, but that does not mean that we can provide all of the EU's needs to replace supply from Russia,” Hendra said, adding that price negotiations will be needed.
Source: Jakarta Post