coal

According to EIA estimates, Indonesia has 5.5 billion short tons of recoverable coal reserves, of which 85 percent is lignite and sub-bituminous. Roughly two-thirds of the country’s coal reserves are located in Sumatra, with the balance located in Kalimantan, West Java, and Sulawesi. In 2004, Indonesia produced 142 million short tons (MMst) of coal, up about 68 percent since 2000. Coal consumption has remained relatively flat in Indonesia, with 2004 consumption at 24 MMst. According to EIA statistics, Indonesia was the second largest net exporter of coal in the world in 2004, with 118 MMst of apparent net exports.
Indonesia adopted a new National Coal Policy in January 2004, which seeks to promote the development of the country’s coal resources to meet domestic requirements and to increase coal exports in the long-run. However, a recent report from the U.S. Embassy in Jakarta suggests that the growth in coal production in Indonesia has been export-oriented, owing to the higher international price fetched by coal producers. Therefore, Indonesian coal exports may be vulnerable to outside market factors. Domestic coal demand has remained rather flat, despite government efforts to substitute relatively cheaper coal for oil or natural gas.