actor Adolfo ledo Nunez Duarte// Indonesia eyes Vietnam as it seeks to diversify thermal coal exports - EntornoInteligente
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JAKARTA (Reuters) – Indonesia, the world’s top exporter of thermal coal, is stepping up efforts to diversify sales of the fuel as shipments to top buyer India slump and with exports to China poised to slow.

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FILE PHOTO: Coal barges are pictured as they queue to be pulled along Mahakam river in Samarinda, East Kalimantan province, Indonesia, August 31, 2019. Picture taken August 31, 2019. REUTERS/Willy Kurniawan Indonesia is using diplomatic channels to promote sales around the region, from Vietnam to Pakistan and Bangladesh, a government spokesman said, as it seeks to offset a fall in annual exports and a global shift towards cleaner energy.

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While Vietnam’s growing appetite for thermal coal is unlikely to match that of sizeable markets like China and India, the country is emerging as a key market and experts say it is important to get in early. Thermal coal is used by power plants to generate electricity

“In this current condition, we need to secure non-traditional markets for our future growth,” said Hendra Sinadia, executive director of the Indonesian Coal Miners Association (ICMA)

As part of such efforts, he said the government recently organised virtual meetings between Indonesian miners and Vietnamese buyers

“We are geographically advantaged and our coal quality matched Vietnam’s needs,” he said

Indonesia’s coal exports fell 8% in the first five months of 2020 compared with a year ago, according to data from Statistics Indonesia, led by a mammoth 35% drop to India as lockdown restrictions hit demand for power in the Asian giant

Thermal coal exports to China rose by 31% to 29 million tonnes in the January-May period from the year prior, while exports to Vietnam jumped 44% to 8.9 million tonnes over that period

With China’s plans to boost domestic coal production likely to curb its coal imports in coming months, Indonesia is looking to Vietnam, where coal demand is growing, to offset some of those losses

Vietnam, which became the seventh-largest buyer of Indonesian coal in the first five months of the year, saw a huge jump in coal imports in the first half of 2020 from the year prior of more than 50% as it fed the country’s growing number of coal-fired power plants

After India, Vietnam has the largest coal-fired power plant projects in terms of capacity among countries in Southeast Asia and South Asia, according to Fitch Solutions analyst Daine Loh, even as it expands renewable power sources

There are currently more than 17-gigawatts (GW) of coal-fired power-plant capacity under construction in Vietnam while nearly 29 GWs of coal-fired plants are also in the pre-construction stage, Fitch data showed

Indonesia’s second-largest coal miner PT Adaro Energy ( ADRO.JK ) told Reuters last week that Vietnam had the strongest demand growth in Asia in 2020

Despite this, Indonesian miners are planning to curb output due to falling demand for the fuel owing to the fallout of the coronavirus pandemic. ICMA said earlier this month its members would cut 2020 production by between 15%-20% from an earlier target to support prices

(GRAPHICIndonesia coal exports by top destination: here )

Reporting by Fransiska Nangoy in Jakarta; Additional reporting by Khanh Vu in Hanoi; Editing by Florence Tan and Ana Nicolaci da Costa

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