The Ministry of Energy and Mineral Resources (ESDM) records a national coal production of 775 million tons throughout 2023, exceeding the 2023 production target of 695 million tons and simultaneously setting the highest record in several decades.
ESDM Minister Arifin Tasrif attributes the surge in production of this black gold commodity to the increased demand in both domestic and international markets throughout the past year.
“There were additions from the ongoing 35 GW power projects that are yet to be completed,” Arifin told a media conference in Jakarta on Monday.
The ESDM Ministry notes that the realization of the domestic market obligation (DMO) for coal in 2023 reached 213 million tons, which is 121 percent of the 177 million-ton target. On the other hand, the ministry targets coal production in 2024 to be around 710 million tons, with a domestic market obligation allocation of approximately 181.28 million tons.
The national coal production for 2022 and 2021 stood at approximately 687 million tons and 614 million tons, respectively. The realization of the domestic market obligation for coal in 2022 was at 216 million tons, and in 2021, it reached 133 million tons. Meanwhile, coal exports throughout 2023 reached 518 million tons, surpassing the figures for both 2022 and 2021, which were 465 million tons and 435 million tons, respectively.
“Our coal exports also increased due to rising demand and some disruptions in the supply of alternative energy,” explained Arifin.
Based on Bloomberg data as of the last trading day of January 12, 2024, the future contract for coal in January 2024 on ICE Newcastle closed up by 0.08 percent or 0.10 points to reach US$130.85 per metric ton. However, within the week, this contract had weakened by -0.53 percent. Additionally, the contract for February 2024 delivery also increases by 0.79 percent or 1 point to reach US$127.25 per metric ton.
In comparison, Reuters reported China’s coal imports hit a monthly record in December 2023, with a 61.8percent year-on-year increase to a record high for 2023. China imported 47.3 million metric tons of coal in December 2023, a 9.7 percent increase from the previous month as buyers stockpiled supplies ahead of the Chinese New Year holiday, starting on February 10, 2024.
The record-breaking cold temperatures in many regions in China also increased the demand for coal. This surge in imports in 2023 set a record, reaching 474.42 million tons, higher than analysts’ expectations of 460 million-470 million tons for the full year. Moreover, in December 2023, the Chinese government reintroduced import tariffs on coal ranging from 3 percent to 6 percent for countries without bilateral free trade agreements.
