Japan asks Indonesia to revoke coal export ban as China, South Korea shrug off supply worries for now
- World’s largest supplier of thermal coal acted as local stockpiles hit critical lows; power outages would be a political problem for Indonesian leader Jokowi
- But experts say ban is likely only short term. So far, importers have coped by pivoting to local reserves and alternative sources in Australia, Russia, India
Jakarta’s stranglehold over local coal supplies has driven a wedge into the free market economics of the global coal trade as miners and Indonesian authorities weigh up an export ban.
Over the weekend Jakarta temporarily halted coal exports to avoid outages at domestic electricity generators as local stockpiles hit critical lows.
Despite immediate concerns over energy security in the region, however, coal analysts said the ban was unlikely to last. But worries over supply disruptions prompted Japan to call for the ban to be revoked on Wednesday. Japan had been importing approximately 2 million tonnes of coal from Indonesia per month for power generation and manufacturing.
A letter from Japan’s embassy in Jakarta to Minister of Energy and Mineral Resources Arifin Tasrif, seen by This Week in Asia, said at least five vessels loaded with coal and bound for Japan were waiting to depart Indonesian waters, but they could not do so as coal export licences had “not been granted”.