Malaysia seeks ‘amicable’ solution to Indonesian coal export ban as Tenaga seeks alternative sources

As Jakarta’s restrictions drag on, Malaysia’s largest power firm is turning to suppliers including Australia, South Africa and Russia

While Indonesia is allowing some vessels to depart, progress has been slow, threatening to sour relations with importers like Japan, Philippines and South Korea

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Workers walk near a tugboat pulling coal barges at a port in Palembang, Indonesia. Photo: Reuters

Published: 8:30am, 18 Jan 2022Updated: 1:05pm, 18 Jan 2022

The Malaysian government is in talks with Indonesia for an “amicable” solution to Jakarta’s coal export ban, as its largest power firm Tenaga Nasional Berhad (TNB) ramps up its search for alternative sources.

Miners in the region said the government-owned private power company’s fuel services department had put out a tender for spot purchases of coal in the past week as the ban drags on, putting more importers in the region on alert.

While Indonesia has signalled an easing of its restrictions, allowing a handful of coal-carrying vessels to depart, progress has been slow, contributing to jitters among importers in the region.

As most coal supply contracts are long-term, power plants and importers resort to spot or “on-the-spot” purchases to supplement sudden unplanned shortages.

TNB said it was mitigating Indonesia’s coal export ban by looking for sources overseas, rejigging supplies to its plants, and considering alternatives like distillate fuel, a derivative of crude oil.

“As a whole, the implementation of an export ban on Indonesia’s coal will impact not only TNB but the whole energy industry in Malaysia,” said TNB Power Generation managing director Nor Azman bin Mufti when asked about the spot tender.

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