Vessel delays expected as Indonesia bans coal exports

Update 21 January 2022

Spica Services have provided an update on the coal export ban that is currently in force in Indonesia. They have advised that the Director General Mineral and Coal issued a directive, stating that the coal export ban has been revoked for those companies that have met their domestic supply obligations.

The directive and full list of companies allowed to resume exports can be read here

Update 12 January 2022

According to Reuters news agency, Indonesia’s Energy Minister has announced that they are waiting for the state utility firm to declare it has secured enough coal before it can decide to end an export ban.

This follows the Indonesian government’s announcement on Monday 10 January that they would allow 14 vessels already loaded with coal cargo to depart as soon as they secured verifications from mining and transport authorities. However, Reuters report that as of Wednesday 12 January these vessels were still awaiting formal approval.

Last Update 05 January 2022

Local correspondents Spica Service advise that the purpose of the export ban is to increase domestic supply over concerns on low stock levels and the threat of power outages.

It is reported that the export ban will remain in place until 31 January 2022. It was anticipated that the policy would be reviewed on 5 January when coal producers were to meet with the government, but according to Reuters news agency, this meeting was postponed for reasons as yet unknown.

The export ban is likely to affect all ships loading coal in Indonesia. Vessels may be prevented from sailing until the ban has expired and permission to sail has been granted. Shippers may declare that the prohibition of exporting coal is a Force Majeure event. Approach your usual contact at North for further guidance or assistance.

As we reported here back in August 2021, under the Domestic Market Obligation (DMO), coal producers are mandated to supply 25% of their output to state-owned power companies. Producers that fail to meet these quotas face export bans.