In what should help soothe the frayed nerves of Indian power companies depending on imported coal, such as Tata Power and Adani Power, an Indonesian industry body chief has ruled out the possibility of the country curbing coal exports though he admitted there were concerns around protecting the country?s reserves for future use.
?The concern is about dwindling coal resources. However, an export ban is unlikely, at least in the short term, given the large size of our coal reserves. In any case, growth in our coal consumption will be limited due to the slow pace of capacity additions in the power sector,? said Suryo B Sulisto, chairman, Indonesian
Chamber of Commerce and Industry, who was recently in Delhi to attend a conference. Sulisto added, ?Indonesia can meet India?s coal requirements so long as the pricing is market-linked.?
Indonesia exports about 90% of its coal production. ?We do not have enough domestic demand for our coal. So, if exports are curbed, we
will lose foreign exchange,? Sulisto told FE.
Significantly, Indonesia?s ambassador to India, Rizali W Indrakesuma, recently sent alarm bells ringing in the power sector by saying that the Indonesian government was considering a ban on export of low-grade coal (with gross calorific value below 5,100 k/cal) used in power generation.
?It?s imperative for Indonesia to tighten its control on exports to secure long-term supplies,? Indrakesuma had told reporters.
As per an estimate, India will need to import at least 165-180 million tonne of coal in 2013-14 to meet its domestic production shortfall. Indonesia, which is the world’s largest exporter, accounts for 70% of India’s total coal imports. Sulisto?s words may offer some relief to those alarmed by the ambassador?s assessment.
Encouraged by rising Indian coal imports, Indonesia switched over to international index-based coal pricing in September 2010, a move that led to a sharp increase in Indonesian coal prices and upset the fuel-cost economics of Indian power companies, which had tied up coal supplies from that country to fire their plants.
