According to domestic media reports on January 6, a paper coal export ban in Indonesia at the end of 2021 caught domestic and foreign buyers off guard. On December 31, 2021, the Indonesian government abruptly announced that it would stop coal exports between January 1 and January 31, 2022 to alleviate the shortage of coal supply in the country to avoid insufficient power supply in the country.
Now that the ban has not been in place for long, Indonesia's coal mining companies and Japan, which uses Indonesian coal as one of the main import sources, have said they will not be able to hold on. Local time reported on January 6 that nearly 100 bulk carriers carrying coal mines have docked in Indonesian ports, carrying a total of about 5.9 million tons, due to the high cost of docking, Indonesia's major coal companies have communicated with the government to seek exemption from the ban, and the review meeting scheduled for January 5 was not held as scheduled.
According to Agence France-Presse, Indonesia's ban appears to be an internal tug-of-war between the energy sector and coal companies. The Department of Energy made this decision because these companies did not meet their domestic market obligations, resulting in a crisis in the coal inventories of power generation companies. However, after the ban, the Indonesian Coal Mining Association and the Ministry of Trade have submitted to the Ministry of Energy a list of companies that have fulfilled their obligations in the domestic market, which recommends lifting the export ban on these companies.
According to Indonesia's national power monopoly authorities and media reports, between 7.5 million and 13.9 million tonnes of coal have been diverted to domestic demand since the ban was issued. According to statistics, Indonesia's coal production in 2021 is about 588 million tons, and it is expected to reach 644 million tons in 2022. From past data, Indonesia's coal production is about 3/4 exports, the largest markets include China, Japan, South Korea and India, of which 45% of coal is exported to China, 15% to India, 8% to Japan, 7% to the Philippines and 5% to South Korea.
Although the mainland has the highest proportion, Japan is relatively more affected by the Indonesian ban. Earlier, the Japanese Embassy in Indonesia had written to Indonesia's energy minister, saying the ban had had a serious impact on Japan's economic activities and daily life. According to the U.S. Energy Agency, Japan is the world's third-largest coal importer, with about 99 percent of its coal coming from imports. Between 2011 and 2018, Japan's first source of coal imports was Australia, Indonesia ranked second and Russia third. In 2019, 68% of Japan's coal imports came from Australia, and 12% of coal came from Indonesia, ranking second.
In addition, nearly half of Indonesia's coal exports are China, but as of now China has not expressed its position on this, some analysts believe that although Indonesia is currently an important source of coal in China, But China itself is also the world's largest fuel producer, so Indonesia's coal ban has limited impact on China, not to mention that there are many options for China's coal imports, these prohibitions have little impact on China, not worth mentioning.