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Coal Highlights
Depleting Reserves
Indonesia is one of the world's largest producers and exporters of coal. Most of country's coal deposits are located in the regions of Sumatra and Kalimantan.
However, coal reserves in Southeast Asia's largest economy are expected to be completely depleted in the next 14 years at current production rate, according to
the Statistical Review of World Energy 2013. Indonesia's coal reserves in 2012 were estimated at 5.5 billion metric tonnes representing 0.6% of the global
reserves. World proved reserves of coal in 2012 were estimated at around 860.9 billion tonnes, sufficient to meet 109 years of global production.

Output
Indonesian coal production surged over the past decade, from 103.3 million tonnes in 2002 to 386 million tonnes in 2012. Despite the significant fall in coal prices
on the global markets, Indonesia's coal production is expected to exceed 400 million tonnes in 2013, according to the Indonesian Coal Mining Association. Coal
production levels are expected to continue to increase as domestic demand for coal will add to the demand from major importers such as China and India. The
expansion of Indonesia's coal-fired power plants is forecast to require an additional 44 million tonnes of coal supply to the domestic market.

Exports
Indonesia, the fourth largest country in the world by population, is the world's leading exporter of thermal coal. The country ships around USD 2 billion worth of coal
a month, one of its largest exports by value.
The value of Indonesia's coal exports fell 8% year-on-year in the first half of 2013 to USD 12.7 billion, Bank Indonesia data shows. At the same time, the volume of
the country's coal exports rose by 14% to 214.8 million tonnes.

Royalty Hike
As of January 2014, Indonesian authorities plan to hike royalties on coal production for mining permit holders, known as IUPs, to between 10 and 13% from 3.5 to
7% currently. The IUP licenses are normally held by smaller or newer miners that are estimated to represent 30% of domestic output. Major miners with Coal
Contract of Work licenses already pay royalties of 13.5%. According to the Indonesian Coal Mining Association, the country's coal output could fall between 30 and
40% next year if the government follows through on its plan to increase royalties.

Sector Players
According to the Ministry of Energy and Mineral Resources, there were 251 coal mining companies operating in Indonesia in 2012, of which 216 were national
private companies while the rest were foreign-owned.
The aggregate net profits of coal companies increased by 92% in 2011 but the situation reversed the following year due to the significant drop in coal prices on the
global markets.

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