Indonesia relaxes export ban – 37 coal vessels depart

Indonesia has allowed 37 loaded coal vessels to leave the country the Coordinating Ministry of Maritime and Investment Affairs said on Thursday.

The ministry said that the export ban announced by the country on December 31st, and intended to last for a month, had been eased for miners that had met a requirement to sell a portion of their output for local power generation. The state utility has now obtained enough coal at power stations to ensure 15 days of operations.

The 37 vessels included 14 ships whose clearance was announced earlier in the week. It was not immediately known how much coal the vessels carried.

Earlier in the weekIndonesia issued permits for the first of the already-loaded coal bulkers to depart its shores. Government officials said on Monday January 10th that, while the coal supply had improved at Indonesian power plants – easing the threat of power cuts that had led to a month-long ban in exports being announced at the beginning of the year – shipments would be resumed “gradually” and that the priority would remain the full restoration of full domestic supply of coal.

Chinese officials confirmed to Reuters that they had received reports that most of the 14 vessels would be sailing to China.

China has reported that it expects 67 bulkers to arrive from Indonesia by the end of the month. Official figures showed that for the first 11 months of 2021 China imported 290m tons of coal, and nearly two-thirds of this came from Indonesia.

Indonesia’s announcement on December 31st 2021 that there would be no coal exports in January had rapid international repercussions, as it is the world’s largest exporter of thermal coal. It was announced that the Philippines’ energy secretary Alfonso Cusi asked the foreign affairs department to become involved and in a letter to Indonesia’s Minister of Energy and Mineral Resources appealed for a reversal of the policy. The 2.3m tons of coal it imports each month from Indonesia is used to create about 60% of the county’s power, and there were fears of power cuts in the Philippines.

Indonesia’s mining industry, some members of which were being threatened with legal action from Chinese importers for breach of contract, has blamed mismanagement at the Indonesian state-owned power utility, which it has been claimed permitted supply levels to fall too low, down to as little as three days’ supply at some of the power plants. However, Indonesian government officials blame the miners, claiming that they had supplied just a fraction of the monthly requisition. Indonesia’s mines are required to allocate 25% of production to be sold at a capped price on the domestic market.

Meetings between Indonesia government officials and the coal producers, discussing the ban and long-term supply arrangements for the country, were reported to be ongoing.