Imported coal prices in India could rise following Indonesia’s decision to ban the export of coal from January amid concerns that the lower supply at domestic power plants could lead to power outages.
Indonesia’s president Joko Widodo has indicated that the export and mining business permits of coal producers could be revoked if they fail to meet their domestic market obligation.
“Companies that are unable to fulfil their obligations to meet domestic needs can be subject to sanctions. If necessary, not only not getting an export permit but also revocation of their business license,” an S&P Global Platts statement quoting the Indonesian president said.
A meeting with miners scheduled on Wednesday to discuss the ban on exports has been postponed by Indonesian authorities, according to a Reuters report.
The implication of an export ban in India would be inflationary, according to market analysts.
“The recent ban imposed by the Indonesian government may again result in global coal shortages Further demand for coal is higher in major coal importing countries due to high economic activities,” ICICI Securities said. “Thus the ongoing global demand-supply dynamics indicate a rise in prices over the next few weeks.”
Coal India capex
Coal India on Wednesday said that it has incurred a capital expenditure of Rs 10,717 crore till December clocking a 37.4 per cent year-on-year growth.
