INDONESIA, the largest thermal coal exporter in the world, will allow some operators to resume shipping out the commodity, said a senior minister today, pointing to a relaxation of a ban decreed on January 1.

Thirty-seven vessels loaded with coal have been released for export as of yesterday, according to a statement by coordinating minister Luhut Pandjaitan.

Indonesia’s export ban was imposed after coal miners failed to meet their obligations towards the domestic market and state electricity company PLN warned of looming blackouts.

Luhut said companies that have met the requirements to sell a portion of their output to the state electricity company for domestic power generation will be allowed to resume exporting.

But, he added, fines will be imposed against operators who fail to meet their contractual obligation to PLN.

He said the relaxation is allowed after the domestic coal reserve for power supply reached a safe level.

The ministry said it is currently making an assessment of companies’ contractual obligations fulfilment and will announce which will be allowed to resume exports. No indication is given about the time the process will take.

“I demand that this be closely supervised to serve as a momentum for all of us to fix the governance in our country, so things like this will not happen again,” said Luhut in a statement.

Indonesia announced it will ban shipments of coal used in power generation for a month starting from January 1, sending markets into panic.

The decision was imposed after coal miners failed to meet their obligation to set aside 25% of output for the domestic market, putting some 10 million customers at risk of widespread blackouts.

Coal producers have little incentive to sell coal on the domestic market, where the price is capped at US$70 (RM290) a metric tonne – far below global prices.

The ban sent the market price soaring and several countries depending on coal urged the government to reconsider its decision, with Japan and the Philippines warning that the ban will seriously affect their economies. – AFP, January 13, 2022.