Indonesia Blocks 3.5 Million Tons of Coal Shipments

Indonesia’s government has blocked shipments of at least 3.5 million metric tons of coal since Jan. 15, after a delay in issuing new trading permits, an industry group said. 

About 70 vessels, each with a capacity of 50,000 tons, are stuck at ports because surveyors checking shipments won’t allow the exports before traders obtain fresh licenses from the Energy and Mineral Resources Ministry, said Bob Kamandanu, chairman of the Indonesian Coal Mining Association. 

“Some traders have declared force majeure because of the permit issue,” Kamandanu told reporters in Jakarta today, without identifying them. “More shipments will be halted as a lot more ships are entering the ports.” 

Indonesia’s mining law of 2009 requires traders to convert old permits into new trading licenses issued by the Energy and Mineral Resources Ministry before they ship products overseas, said Djunaedi, head of mining exports at the Trade Ministry said Jan. 26. The ministry halted the process of giving out new licenses while waiting for the ministerial decree to be issued, Djunaedi, who uses one name, said at the time. 

Alberth Yusuf Tobogu, export director of mining and industry products at the Trade Ministry, and Djunaedi didn’t answer two calls to their mobile phones seeking comment.

Force majeure is a legal clause that allows producers to miss deliveries because of circumstances beyond their control. 

Indonesia, the world’s largest thermal coal exporter, has since 2008 required all exports of coal, metal ores and concentrate to be verified by government-appointed surveyors to prevent illegal shipments of commodities. 

Coal prices at Newcastle, Australia, may climb 34 percent on average this year as floods cut supplies and Asian demand soars, Societe Generale SA said in a Jan. 20 report. The Asian benchmark dropped to $125.25 a ton for the week ended Jan. 28, compared with $138.50 a ton, a 28-month high, on Jan. 14, according to data from Petersfield, England-based IHS McCloskey. Source:  Bloomberg