Indonesian coal producers plan to cut coal outputs in the hope of bolstering prices, an association has said.
The move came as the global economic fallout fueled by the COVID-19 pandemic has depressed demands and weakened prices of the commodity.
Pandu Patria Sjahrir, head of the Indonesian Coal Mining Association, said the producers plan to cut 115 million tons of the initial production target of 595 million tons, media reported on Thursday.
“The association conceded that a control on the national production is urgently needed to lower outputs to 480 million tons this year, so that a balance of global supplies and demands can be stricken,” he pointed out.
The production cut with the government support would be the best way to make the country’s coal mining industry survive the situation dashed by the virus pandemic, according to the association.
“If the mining firms survive, the central government and regional administrations will benefit from it,” Sjahrir said.
The Indonesian Energy and Mineral Resources Ministry has set the coal reference price for June at 52.98 U.S. dollars per metric ton, nearly the same level in 2016.
Indonesia is the world’s largest exporter and producer of thermal coal.
Source: China – ASEAN Business Council