11-01-2022 Indonesia allows coal-laden bulkers to sail as fate of export ban to be decided on Wednesday, By Jonathan Boonzaier, TradeWinds
Indonesian authorities have backed down from a blanket ban on coal exports, giving permission for fully loaded bulk carriers to depart. In addition, the government will decide on Wednesday whether to scrap the export ban entirely, according to a report by Reuters.
The country’s coordinating minister of maritime affairs Luhut Pandjaitan — who is often referred to locally as Mr Fixit — said that the vessels that had been given permission to sail could depart as soon as they secured verifications from mining and transport authorities. The partial easing of the ban on Monday comes after 10 days of intense negotiations between government leaders and the Indonesian coal industry to resolve serious coal shortages at the power plants of state-owned utility Perusahaan Listrik Negara (PLN). “As of today, after seeing a much better supply condition at PLN, 14 vessels that have already been fully loaded with coal and have been paid by the buyers, can be immediately released for export,” Pandjaitan said. “There are already a few dozen ships that have been filled with coal and have been released. Tomorrow they will depart,” he told local media on Monday.
Pandjaitan added that the government would conduct a review on Wednesday. If it decided to scrap the ban it would do so gradually, as it considered how the resumption affected compliance with the domestic market obligation rules that require miners to sell 25% of the coal, they produce to PLN at $70 per tonne, a rate well below market levels. Luhut has said the government will produce a new formula for the pricing so PLN would pay at market price, which is currently more than $200 per tonne.
The coal export ban, which was implemented without warning on 1 January, has disrupted the operations of nearly 200 supramax to panamax-size bulkers that were loaded, loading, or ready to load Indonesian coal. Industry sources told TradeWinds on Monday that while loading had continued for some ships, others had begun to cancel Indonesian loading dates, with some charters looking at how to extricate themselves from fixtures as shippers declared force majeure.
Government leaders from Indonesia’s main Asian coal customers — Japan, South Korea, the Philippines, and India — have put strong pressure on the government to lift the ban as they feared that they too would begin to run short of coal.