17/01/2023
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The Indonesian coal industry is rather fragmented with only a few big producers and many small players that own coal mines and coal mine concessions (mainly in Sumatra and Kalimantan).
Since the early 1990s, when the coal mining sector was reopened for foreign investment, Indonesia witnessed a robust increase in coal production, coal exports and domestic sales of coal. The latter, however, has always been rather insignificant as domestic consumption of coal is relatively small in Indonesia.
But in recent years there has been a rapid increase in domestic coal sales because the Indonesian government is committed to its ambitious energy program (implying the construction of various power plants, mostly coal-fired because Indonesia has plenty of coal reserves).
Moreover, several big Indonesian mining companies (for example coal miner Adaro Energy) have expanded into the energy sector as prolonged low commodity prices made it unattractive to remain focused on coal exports, hence becoming integrated energy companies that consume their own coal.
Roughly between 70-80 percent of Indonesia’s coal production is exported abroad, the remainder is sold on the domestic market. During the 2000s commodities boom the coal mining industry was very lucrative as coal prices were comfortably high. Hence, many Indonesian companies and wealthy families decided to acquire coal mining concessions on Sumatra or Kalimantan in the late 2000s. Coal became known as the “new gold”.
Indonesia
