The Indonesian coal sector expects to reduce coal exports by as much as 17% in 2016, from 330-360 Mt in 2015 to less than 300 Mt in 2016, in a context of slowing Chinese demand contributing to the global oversupply and to falling international prices.
Coal exports already fell by 20% over the first nine months of 2015 and, in 2015, benchmark thermal coal has been falling by around 16% to reach a nine-year low level of US$51.84/tonne.
The Indonesian government has abandoned plans to ramp up coal royalties, to support the sector, as more than 60% of Indonesian coal producers are suffering from insufficient cash flow and miners are now halting production or doing "selective mining", focusing on easy-to-access coal fields. Producers are also increasingly turning to the domestic market, whose demand should increase from about 90 Mt in 2015 (70 Mt in 2014) to up to 110 Mt in 2016.