Russia’s Coal Export Will Be Banned. Big Opportunity for Indonesia!

coal export

The European Union Commission has proposed a ban on the purchase of Russian coal as a further EU sanction for Russia’s attack on Ukraine. The plan is that this ban will take full effect in August 2022.

Indonesia’s opportunity to export coal to several European countries is wide open regarding this ban.

Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia revealed that since the Russo-Ukrainian war began on February 24, 2022, several European countries have been exploring to find coal supplies from Indonesia. However, they do not know for sure exactly.

“Several potential buyers even since last February, since the outbreak of war, have been exploring to find supplies from Indonesia,” said Hendra, Friday (4/8/2022).

“With the import of Russian coal tires (import ban) by Europe, of course, buyers, buyers from Europe would not want to go all out to look for supplies, either from Australia, South Africa, Colombia, and Indonesia,” he said.

Furthermore, Hendra assessed that the opportunity for coal exports to several European countries is indeed possible. However, it also depends on the quality of the coal needed.

He added, “Freight prices as well, also from the supplier’s side, does anyone have a slot for the required quality and others,” he added.

On the other hand, the general chairman of the Indonesian Mining Experts Association (Perhapi) Rizal Kasli said the same thing. Rizal believes that the policy of prohibiting the purchase of Russian coal by European countries will certainly have an impact on increasing supply-demand, especially from Indonesia, which is one of the largest coal producers.

However, this does not mean that Indonesian coal that will enter Europe will replace Russian coal. At least, according to him, Europe will take more coal from South Africa and Latin America, which are relatively closer to Europe, than from Indonesia.

“Indonesia also has the opportunity to export its coal to Europe to fill the current supply shortage,” he said.

As is known, the European Union Commission’s plan to ban the purchase of coal from Russia has caused panic among coal consumers in Europe. The reason is, that they must immediately find an alternative to the Russian coal supply with other sources, one of which is Indonesia.

Several coal consumers from Europe have flocked to ask for coal shipments from Indonesia. Requests are not only from companies but also on behalf of the government.

This happens because these European coal buyers prioritize the availability of energy supplies and security for their countries first.

With this condition, he sees the price of coal will continue to soar. According to him, the price is not yet at its peak.

Although on Thursday trading (07/04/2022), the price of coal contract in May closed down 0.64% compared to the previous day but was still in a high position, namely US$ 287.5 per ton.