The Indonesian state-owned coal producer Bukit Asam has raised its 2023 coal output target by 13% to 40 Mt, up from a target of 35.5 Mt in 2022. The higher output target for 2023 is set based on expectations of an increase in coal consumption from the domestic market and an increase in exports. In November 2022, the Indonesian government issued letters of assignment to 125 companies in the coal sector to supply 161 Mt of coal to the power generation sector in 2023. Bukit Asam is one of the companies that received a letter of assignment, with an allocation of 12.32 Mt for next year.
Bukit Asam also expects its coal exports to increase, as it has simultaneously signed a memorandum of understanding with the logistics company RMK Energy to ensure its increase in production will not be bottlenecked by logistics constraints. Under the agreement, RMK Energy will transport coal for Bukit Asam with an initial volume of 2.5 Mt, which can be increased by an additional 1 Mt/year. In addition, Bukit Asam is currently collaborating with Indonesia’s railway operator KAI to develop a 20 Mt/year coal transportation corridor on the Tanjung Enim-Keramasan route, which is expected to become operational by the fourth quarter of 2024.
Between January and September 2022, Bukit Asam already produced 27.7 Mt of coal. In 2021, Buki Asam produced around 30 Mt of coal while Indonesia as a whole produced 592 Mt (and exported 468 Mt). Indonesia is still very reliant on coal, as it represented 50% of the country’s installed capacity with 39.5 GW and 62% of its power generation with 190 TWh (2021).