India’s crisis: India is experiencing an electricity crisis due to the extreme heat that hit the country. Moreover, they are also hit by the coal crisis. Reportedly, the available coal supply is only available for 3 days.
Previously, Indonesia received export requests from India to meet coal needs. Unfortunately, Indonesia has not been able to provide such assistance. Why?
The Daily Executive Director of the Indonesia Mining Association (IMA), Djoko Widajatno, is aware that the current state of electricity in India is quite critical. The country has at least three days of operating daily reserves for electricity generation due to dwindling coal supplies.
According to him, Indonesia can still fulfill India’s crisis request following the signed request. However, if it is to increase the supply of coal to India, it seems quite difficult to do.
“We can still fulfill India’s demand following the signed request, but it is impossible to increase it because we need to fulfill Indonesia’s own needs with DMO and also the problem of limited production due to the weather so that India is experiencing difficulties,” Djoko was quoted as saying recently.
Djoko admitted that through traders, India had started asking for additional coal allocations. However, if you look at the current conditions, miners cannot fulfill these additions.
The reason is, that in boosting production, mining companies also still need approval for changes to the application for the Work Plan and Budget (RKAB) that have been previously determined. Meanwhile, the government must also maintain a balance of coal reserves with current needs.
“Don’t produce it all out, we’ll run out,” he said.
As for this year’s coal production target, which has been set at 625 million tons. At least 12-15% is allocated to India, while 50% is for exports to China.
“This is quite large and India wants to increase the quota from Indonesia, but we are still experiencing problems with the weather adjustments with the RKAB permit, which takes time and is complicated,” said Djoko.
Meanwhile, Director of PT Bumi Resources Tbk (BUMI), Dileep Srivastava also stated that demand from India is increasing, however, the current high price of coal has prevented India from importing more coal.
“But now it has to continue and demand is expected to increase,” Dileep said.
Unfortunately, Dileep said, due to the La Nina phenomenon season and heavy rains since the fourth quarter of 2021 in Indonesia, coal production has decreased. Therefore, coal producers from Indonesia have decided to prioritize the fulfillment of coal for domestic needs, especially PT PLN (Persero).
“Hopefully the rains can ease from late May 22, until then supply is very limited and it is difficult to meet new demand arising from the Ukraine war. However, we see upward pressure on coal prices which are likely to remain high this year and possibly beyond,” said Dileep.
The Government of India is reported to have taken note of this situation and has mandated that 10% of coal consumption by coastal power plants should be imported for the next 3 years. There are also reports that the industrial sector is suffering as the priority is generating power