* Bumi, Adaro to climb to two of top three global exporters
* China to add additional 1 bln tonnes in production through
* China's production increase will not able to meet demand
By Rebekah Kebede
NUSA DUA, Indonesia, May 31 Indonesia will lead
global growth in thermal coal exports in the next decade with
producers Bumi Resources and Adaro Energy
becoming two of the top three coal exporting companies worldwide
by 2015, energy consultancy Wood Mackenzie said on Tuesday.
The Southeast Asian country, already the world's top thermal
coal exporter, will make up 39 percent of global increases in
coal exports, with Australia coming in a close second,
accounting for 36 percent of export growth.
"Indonesia will be the largest country for growth in thermal
coal exports... (Bumi Resources and Adaro Energy) each own mines
at the top of the 10 largest mine expansions for thermal exports
in the world," Rudi Vann, a coal analyst with Wood Mackenzie
told Reuters, adding that six of the 10 largest mine expansions
globally will be in Indonesia.
By 2020, Indonesia's annual production will be above 500
million tonnes, a more than 50 percent increase from last year's
production of 320 million tonnes.
About a quarter of that, some 130 million tonnes, will be
from new greenfield projects, and about 60 percent of which will
CHINA OUTPUT LAGS DEMAND
Indonesia's coal export growth will be fueled in large part
by China and India, where power demand is expected to lift coal
imports significantly over the next five years.[ID:nL3E7G41O8]
Chinese coal imports could more than double by 2015, trading
house Noble Group said, and Wood Mackenzie estimates
that China, the world's largest producer and consumer of coal,
will produce an additional 1 billion tonnes through 2015 to meet
"If you put that into context with all the other coal
producing countries around the world, there is far greater
growth happening in China than you're seeing anywhere else in
the world," Vann said.
But with skyrocketing demand for fuel, Chinese domestic
production will lag demand.
"We think it's going to become a structural shift where the
local coal industry will not be able to keep up physically with
them in China. For them to physically increase their production,
there's a lot of infrastructure that needs to be built, a lot of
coal projects that need to come online," Vann said.
Still, India, which will overtake Japan as the biggest buyer
of Indonesian coal in 2011, will stay ahead of China in the
competition for supply from Indonesia, where it gets most of its
The more than 50 percent surge in Indonesia's coal
production will require significant investment, particularly as
newer mines move farther inland, requiring additional
infrastructure for export.
"With opportunities for thermal seaborne exports, Indonesia
needs to continue to attract new investors to sustain production
increase ahead of its largest competitor -- Australia," Vann
Despite complaints from some in the industry that
Indonesia's recent overhaul of mining laws has stymied growth,
Wood Mackenzie said Indonesia is relatively well placed to
"Royalties have actually reduced as Indonesia tries to
attract more investment into the country and the tax rate has
also reduced for producers of coal from previous years to the
current system," Vann said.
"Despite this uncertainty with the new regulations in place,
Indonesia's continually increased its production and exports
over the last few years... they always seem to find a way to
work around these challenges."
(Editing by Ramthan Hussain)