After Export Ban on Coal, Risk of Disruption of Other Commodity Supply Chain in Indonesia Increases

The largest coal exporting country Indonesia has temporarily suspended the operations of over 1,000 miners for violating the country’s internal regulations. According to the Minerals and Coal Directorate General of the mining ministry, the miners have not submitted work plans for 2022. They now have 60 days to do so.

“If within that period the companies still have not submitted their work plan then they will be given a strict sanction of permit revocation,” Sony Heru Prasetyo, an official with the Directorate of Minerals and Coal announced Friday

Among them are said to be around 80 coal miners, as well as gold, tin, nickel, bauxite, and manganese miners.

Since Indonesia is a major producer of nickel and tin, this could hit the electronics industry especially hard. Tin prices are already at an all-time high, currently at $44,190.00 per ton. Since the outbreak of the pandemic, tin prices have increased by 160%. The country is the second-largest producer of tin in the world after China.

Nickel is no different. Indonesia is by far the world’s largest nickel mining country with around 1 million tons of nickel production in 2021. Nickel prices are also higher than they have been in over 10 years. Back then, nickel prices shot up during the banking crisis in 2011. Today, the price of nickel is back at $23,701.50 per ton. Nickel is particularly important for the battery production of electric vehicles, which is currently being promoted by politicians around the world.

At the beginning of the year, the Indonesian government had already imposed an export ban on coal because coal producers had not complied with the regulations. The coal prices rising again strongly since the beginning of 2022 have already risen by over 36%. The price for coal is currently $189.00 per ton.

Indonesia wants to have a better overview of the mining industry in the country and has been taking stricter action against violations since the beginning of the year. More than 2,000 companies are said to have had their mining licenses suspended last month for failing to comply with the law.

More articles on the subject

Thermal Coal Prices on the Track to a New Rally in 2022

Global nickel production to increase by 6.3% in 2021

Nickel Rises Quietly

5 Comments

Leave a Reply

Change Language
%d bloggers like this: