The government plans to boost national coal production this year.
The Ministry of Energy and Mineral Resources (ESDM) ensures that a number of coal companies are submitting revised Work Plans and Budgets (RKAB) entering the second half of 2023.
Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia revealed, with production trends throughout the first semester of 2023, there is potential for increased production to occur for the remainder of this year.
"The average production in the first semester of 2023 is 61 million tons per month. If this trend continues in the second semester of 2023, it is likely that the total production will be more than 700 million tons," Hendra, Wednesday (9/8).
Hendra added, generally the composition of coal demand in the second half of 2023 will still be the same for both the domestic and export markets.
However, a number of things deserve the attention of the government in order to boost coal production in the remainder of this year.
Hendra explained, the smooth production of coal will be affected by price fluctuations. In addition, coal companies are also facing the challenge of increasing operating expenses.
According to him, there are a number of conditions that have the potential to hamper this year's production increase plan.
"The disparity between the Reference Coal Price (HBA) and the selling price affects the company's profitability," explained Hendra.
The policy of depositing Foreign Exchange Export Proceeds from Natural Resources (DHE SDA) by the government is considered to have the potential to add to the burden on business actors. Furthermore, the coal channel collection scheme through Government Agency Partners (MIP) will also be a factor affecting smooth production.
"In the midst of the government's efforts to encourage increased productivity, on the other hand, companies are burdened due to the downward trend in prices and government policies are increasingly burdensome for businesses," said Hendra.
On the other hand, a number of coal companies experienced an increase in production in the first semester of 2023. However, a number of coal companies chose to maintain their production targets for the rest of this year.
PT Golden Energy Mines Tbk (GEMS) Corporate Secretary Sudin Sudiman said that until now the company has not changed its production target.
However, production increases did occur for the first six months of this year.
"Until now we have no plans to revise the RKAB. Production in the first semester of 2023 is 20.4 million tons," Sudin told Kontan.co.id, Wednesday (9/8).
Sudin explained, the production achievement increased 16% year on year (yoy) compared to the same period in the previous year. The achievements in the first semester of 2023 are still in accordance with the company's target.
It was noted that this year GEMS targets coal production of 40 million tons with sales of around 41 million tons.
Director of PT ABM Investama Tbk (ABMM) Adrian Erlangga explained, so far the company's production target has not changed.
"We have no plans to revise the RKAB. (But) the operational performance in the first half of 2023 is better," Adrian told Kontan, Wednesday (9/8).
Adrian revealed that the operational performance which was better than last year also had a positive impact on the company's financial performance in the first half of this year.
Likewise, Director and Corporate Secretary of PT Bumi Resources Tbk (BUMI) Dileep Srivastava emphasized that the company will still survive with a production target of around 75 million tons to 80 million tons.
"There has been no change to the production target, it is still in accordance with the current RKAB target," explained Dileep, Wednesday (9/8).
It was recorded that BUMI's coal production in the first semester of 2023 reached 35.4 million tons, an increase of 2% yoy compared to the same period the previous year of 34.5 million tons.
Referring to Minerba One Data Indonesia (MODI), coal production until August 8 2023 reached 433.51 million tonnes or 62.42% of the planned production of 694.50 million tonnes.
Of this amount, coal sales for the export market reached 160.32 million tonnes or 34.85% of the total export plan this year of 460 million tonnes. Furthermore, the realization of coal supply for the domestic market or the Domestic Market Obligation (DMO) reached 71.06 million tons or the equivalent of 40.19% of this year's DMO target of 176.80 million tons.
Image source: ANTARA FOTO/NOVA WAHYUDI