Philippines, Japan call on Indonesia to lift coal export ban

By Shotaro Tani and Cliff Venzon | Nikkei Asia | January 10, 2022 4:53PM JST

Jakarta took step this month in face of dwindling stockpiles

JAKARTA/MANILA — Asian countries that rely on Indonesian coal to generate power are calling on the nation to drop its ban on exports of the commodity, with the Philippines the latest to reach out to Jakarta.

The Philippines energy department said in a statement on Monday that Energy Secretary Alfonso Cusi last week “appealed” to his Indonesian counterpart, Arifin Tasrif, to lift the ban, “specifically to the Philippines.”

Cusi said in a letter to Tasrif that Indonesia’s policy will be “detrimental to economies that [currently] rely on coal-fired power generation systems, like the Philippines.”

Indonesia imposed a one-month ban on coal exports on Jan. 1, saying it faced critically low stockpiles that would hit power grids serving the islands of Java and Bali, as a host of coal miners had not met their so-called Domestic Market Obligation, whereby they must supply 25% of annual production to the local market.

According to Cusi, the Philippines last year sourced 2.3 million tons of coal from Indonesia each month to fuel its coal-fired energy plants. “Power generated from coal comprises about 60% of the country’s power demand,” Cusi said in his letter.

Cusi has also asked Manila’s foreign ministry to “intercede and appeal on behalf of the Philippines, through the Association of Southeast Asian Nations (ASEAN) Cooperation mechanism.”

The Philippines joins Japan and South Korea in targeting the ban. Japan’s ambassador to Indonesia, Kenji Kanasugi, sent a letter dated Jan. 4 to Indonesia’s Ministry of Energy and Mineral Resources calling for the ban to end. Tokyo repeated the same message on Monday, when Minister of Economy, Trade and Industry Koichi Hagiuda, who is currently in Jakarta, met with Tasrif.

“Coal imports from Indonesia are important for Japan’s stable electricity supply … I came here to find a solution. We hope for your understanding,” he said in the meeting.

Meanwhile, South Korean Trade Minister Yeo Han-koo recently met online with his Indonesian counterpart, Muhammad Lutfi, raising concerns over the ban and requesting the prompt restart of coal shipments, Yonhap News Agency reported.

Indonesia has capped the domestic coal price at $70 per ton — below half current market prices.

While the export ban was supposed to be reviewed on Jan. 5 and a senior government official said last week that the emergency is “over for now,” weekend talks between the government and the Indonesian Coal Mining Association failed to pave the way to lifting the restriction.

Source: Nikkei Asia

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