ASEAN KEY DESTINATIONS
Indonesia leads coal exports through 2020
Wood Mackenzie said the country, already the world’s top thermal coal exporter, would make up 39 percent of global increases in coal exports, with Australia coming in a close second, accounting for 36 percent of export growth.
“Indonesia will be the largest country for growth in thermal coal exports,” said Rudi Vann, an analyst with Wood Mackenzie.
“[Bumi Resources and Adaro Energy] each own mines at the top of the 10 largest mine expansions for thermal exports in the world,” he said, adding that six of the 10 largest mine expansions globally would be in Indonesia.
By 2020, Indonesia’s annual production will be above 500 million tonnes, a more than 50 percent increase from last year’s production of 320 million tonnes.
About a quarter of that — some 130 million tonnes — will be from new greenfield projects, and about 60 percent of which will be exported.
Indonesia’s coal export growth will be fueled in large part by China and India, where power demand is expected to lift coal imports significantly over the next five years.
Chinese coal imports could more than double by 2015, trading house Noble Group said, and Wood Mackenzie estimates that China, the world’s largest producer and consumer of coal, will produce an additional 1 billion tonnes through 2015 to meet that demand.
“If you put that into context with all the other coal-producing countries, there is far greater growth happening in China than you’re seeing anywhere else in the world,” Vann said.
But with skyrocketing demand for fuel, Chinese domestic production will lag demand.
“We think it’s going to become a structural shift where the local coal industry will not be able to keep up physically with them in China,” Vann said.
“For them to physically increase their production, there’s a lot of infrastructure that needs to be built, a lot of coal projects that need to come online,” he added.
Still, India, which will overtake Japan as the biggest buyer of Indonesian coal this year, will stay ahead of China in the competition for supply from Indonesia, where it gets most of its exports.
The more than 50 percent surge in Indonesia’s coal production will require significant investment, particularly as newer mines move farther inland, requiring additional infrastructure for export.
“With opportunities for thermal seaborne exports, Indonesia needs to continue to attract new investors to sustain production increase ahead of its largest competitor — Australia,” Vann said.
Despite complaints that Indonesia’s recent overhaul of mining laws has stymied growth in the sector, Wood Mackenzie says Indonesia is relatively well-placed to attract investment.
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