Indonesia to Use Up 12% More Coal This Year as New Mineral Smelters Start Operation

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The Energy and Mineral Resources Ministry projects that domestic coal consumption will rise by 12 percent this year, thanks to additional demand from up to eight new mineral smelters.

Indonesia is expected to use up 155 million tons of coal this year to fire up its power plants, smelters and steel factories, up from 138 million tons last year, Energy and Mineral Minister Arifin Tasrif said on Thursday.

Indonesian coal miners Bumi Resources, Adaro Energy, Tambang Batubara Bukit Asam and their smaller peers are expected to produce a total of 550 million tons of coals, down 9.8 percent from last year’s 610 million tons. The lower projection is due to the miners exceeding last year’s production quota of 489 million tons.

Arifin said additional demand from the smelters would account for some of the increase in coal consumption this year. The minister said the government expected eight new mineral smelters to start operation this year. Last year, 17 new mineral smelters were opened.

“We will continue to build new smelters, creating a multiplier effect to improve people’s lives,” Arifin said at a press conference in his office in Jakarta on Thursday.

Arifin said the government would also intensify monitoring of smelter construction as mandated by a 2017 government regulation on mineral and coal mining.

Meanwhile, the government has kept to a modest oil and gas production target this year after missing last year’s output goal. The oil production target for 2020 was the same as last year’s 755,000 barrels of oil per day (bopd), up 1.2 percent from last year’s realization of 746,000 bopd.

The government has also cut the gas production target by 4.7 percent to 1.19 million barrels of oil equivalent per day (boepd) since last year’s gas production of 1.06 million boepd was 19 percent below the 1.25 million boepd target.

Arifin said the government wants to encourage oil and gas companies to accelerate exploration and development of oil and gas blocks, implement more advanced technologies and produce more innovations. The government will also monitor its oil and gas projects in a more timely manner and maintain its production infrastructure, the minister said.

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