Jakarta, CNBC Indonesia – Business actors through the Association of Indonesian Coal Companies (APBI) noted that Indonesia will have various losses due to the impact of the export ban which was officially issued by the government from January 1 to January 31, 2022.
The chairman of APBI, Pandu Sjahrir, said that the general export ban on Mining Business Permits (IUP), IUPK and PKP2B holders would have a significant impact on the coal mining industry in general.
Coal export activities in particular, which are currently being promoted by the government, will primarily have an impact on state revenues.
What are the impacts that will occur when coal exports are banned? Listen!
- The volume of national coal production will be disrupted by 38-40 million MT per month;
- The government will lose foreign exchange from coal exports of approximately US$ 3 billion per month;
- The government will lose tax and non-tax revenues (royals) which this too
have an impact on the loss of local government revenue; - Coal producers’ cash flow will be disrupted because they cannot sell export coal;
- Ships destined for export, almost all of them are vessels operated or owned by
export destination countries. These ships will not be able to sail following the implementation of this foreign sales prohibition policy, in which case the company will be subject to additional costs by the shipping company for the additional usage time (demurrage) which is quite large (US$20,000 – US$ 40,000 per day per vessel) which will burden the exporting companies which will also have an impact on state revenues; - Ships sailing to Indonesian waters will also experience conditions of uncertainty and this has resulted in Indonesia’s reputation and reliability as a global coal supplier;
- Mass majeure declaration from coal producers because they cannot deliver export coal to buyers who have contracts so that there will be many disputes between sellers and buyers of coal;
- The general application of export bans due to non-compliance by some companies will be detrimental to compliant companies and are often asked to make up for supply shortages;
- Creating business uncertainty that has the potential to reduce investment interest in the mineral and coal mining sector.
As a partner of the Government, we always support the policies and regulations issued by the Government. But of course we hope that we can be involved or at least ask for clarification if there are complaints experienced by domestic coal users including PLN.
“APBI hopes that the government will also focus on efforts to permanently resolve structural problems in the domestic coal supply, as we have several times officially submitted our proposals for the short and medium term,” explained Pandu.
The Ministry of Energy and Mineral Resources through the letter from the Directorate General of Mineral and Coal Number B-1605/MB.05/DJB.B/2021 issued on December 31, 2021, officially prohibits coal mining companies from exporting coal.
The government has taken a policy to ban coal exports for the period 1 to 31 January 2022 for holders of Mining Business Permits (IUP) or IUPKs for the Production Operation stage, IUPK as Continuation of Contract/Agreement Operations and PKP2B.
This step is taken to ensure the fulfillment of coal supply for power plants. This lack of supply will impact more than 10 million PT PLN (Persero) customers, ranging from the general public to industry, in Java, Madura, Bali (Jamali) and non-Jamali areas.
“Why are all exports prohibited? They are forced and this is temporary. If the export ban is not enforced, nearly 20 Steam Power Plants (PLTU) with a power of around 10,850 megawatts (MW) will be extinguished. This has the potential to disrupt the stability of the national economy,” explained the Director General of Mineral and Coal. Ridwan Djamaluddin.
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