The Indonesian government has lowered its coal production target for this year to 400 million t as the country’s coal miners cut production amid lower global and domestic demand and subdued prices, according to a report from Indonesia Investments.
Last year, the world’s top exporter of coal mined 458 million t. But, with little sign that prices will recover soon, Indonesian mining companies are shutting down operations. According to the Indonesian Coal Mining Association, nearly 80% of coal mining companies have already temporarily halted production as prices has fallen below the cost of production.
Declining demand for coal imports from China has hit Indonesia’s coal producers hard, with shipments into the country down 37.5% in 1H15 y/y. Reduced demand from state-owned utility, PLN, has also seen domestic demand drop, putting further pressure on the industry.
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