Coal Price Increase is Positive for Foreign Exchange

Tarumanegara University mining observer Ahmad Redi said the realization of national coal production in the first quarter of 2021 had exceeded the target, from the planned 550 million tons of coal to 625 million tons of coal. This amount experienced an increase in production of 75 million tons of coal.

Therefore, he estimates that the increase in the price of coal from around US$80 per ton to US$200 per tonne will benefit the company and the state.

“The country because there is foreign exchange there. The two coal companies, because when production was massive with the highest price in the history of buying and selling coal at 240 dollars per ton. I think this natural resource economic potential for companies and the government is extraordinary,” said Ahmad Redi to the press. FLY, Wednesday (6/10).

However, Redi said the increase in coal prices did not apply to PLN. The reason is that the government has set a special price provision for PLN because it involves the livelihood of many people, which is around US$70 per ton.

He is also not worried that the increase in coal prices will disrupt the availability of coal in the country. Because there are provisions for mining companies that require 25 percent of their production for domestic needs.

“So there is no reason for them not to sell domestically. Please export 75 percent of it, but 25 percent must be domestically,” he added.

APBI : Not All Coal Companies Enjoy Profit

Meanwhile, Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia said that not all coal companies can benefit when there is an increase in coal prices. This is because a number of coal companies have contracted with a certain price and time. Thus, only companies that sell coal can benefit directly.

“But still, whatever the scheme, whether direct or contractual, this (increase) is profitable. And the state can benefit from increased state revenues, so that our trade balance is good,” explained Hendra to FLY, Thursday (7/10).

The Dayak people of Central Kalimantan protest the development of coal mining in their area (photo: courtesy).

The Dayak people of Central Kalimantan protest the development of coal mining in their area (photo: courtesy).

Hendra added that the increase in coal prices will also strengthen the value of the rupiah because it is supported by foreign exchange for coal exports. However, Hendra also reminded companies to invest in energy transition. Because the company’s burden will increase in terms of taxes and royalties that will be increased. Not to mention, he said, the high price of coal could drop at any time.

“Now we are blessed again, but if we count the last five years, it is more negative. Because prices are unstable,” he added.

Potential Environmental Damage

Coordinator of the National Mining Advocacy Network (Jatam) Merah Johansyah said the increase in coal prices had triggered coal production.

He said, this has an impact on environmental damage in coal mining areas. Among others, in the provinces of East Kalimantan, South Kalimantan, South Sumatra, West Sumatra, and Jambi. Not to mention, illegal mining of coal to pick up for when prices are soaring.

“East Kalimantan is very affected because illegal coal is excavated and dredged in residential areas and disturbs the comfort of the residents,” said Merah Johansyah to FLY, Sunday (10/10).

Merah Johansyah added that the practice of illegal coal mining is difficult to eradicate because it is suspected that it involves officials. Although the practice is visible to the public eye.

In fact, he said, the community intervened on their own because law enforcement officials did not act in the face of illegal coal mining. For example, residents of Muang Village, Samarinda, East Kalimantan, who yesterday experienced a flood that was thought to have originated from a coal mine. (sm/em)

Check Also

China’s Military Power Is Expected To Overtake The US And Russia In The Near Future

A US military general warned that it was only a matter of time before China’s …

Leave a Reply

Your email address will not be published.