Coal Production Limited to 450 Million Tons

TEMPO.CO, Jakarta - For the next few years, the government plans to set a cap on coal production between 425 million tons per year to a maximum of 450 million tons per year. 

The director general for minerals and coals at the Ministry of Energy and Mineral Resources, R. Sukhyar, said in Jakarta on Thursday that the government was committed to conserving its coal for Indonesia's future generations. 

"It is important to set a limit on production because we have to conserve it for use by our future generations," said Sukhyar. 

According to him, if the production cap is set between 425-450 million tons per year, then Indonesia's coal reserve will not run out for at least another century.

That said, however, the government has no plans to completely cease exporting coals.

"We will only reduce the portion that we export in order to fill domestic needs first. Production will continue as usual," he said.

The cap on production is in line with the draft of the National Energy Policy (KEN), which mandates the reduction of coal exports and to increase the utilization of coal within Indonesia, added Sukhyar.

"The government plans to prioritize domestic needs over exports. We will only export if we record a surplus. Also, domestic use should be prioritized should there be an emergency that threatens Indonesia's domestic supply," said Sukhyar.

He added that controlling the production of coal also helps maintain prices by preventing oversupply.

"We lose money when the prices drop. What's the point of gearing production up when the prices are so low?" he said.

Limiting production can also help conserve the environment, added Sukhyar.

Throughout 2014, the government has set the cap at 390 million tons. The cap is going to be set at 425 million tons in 2015.

Currently, coal prices have fallen to around US$60 per ton, down from about US$100 per ton in the previous year.

ANTARA