* Indonesian coal prices up 30 pct this year
* Govt targets mining non-tax revenues of $2.3 bln
* Production increase may take more than 6 months -assoc
* Exports increasing on price margin -assoc
(Adds comment from coal industry association, coal price data)
By Fergus Jensen
JAKARTA, Oct 18 The current rally in thermal
coal prices could extend through to the end of the first quarter
of 2017, an Indonesian mining ministry official said on Tuesday,
helping cash-strapped miners boost revenues in Southeast Asia's
Asian coal prices have surpassed earlier estimates and
rallied this year as producers trimmed supply due to concerns
over demand. The rally is now among the commodity's top-three
bull-runs on record.
Indonesia, where thousands of coal mines went out of
business as prices cratered, is now confident of achieving its
target of 30.11 trillion rupiah ($2.32 billion) in non-tax
revenue from mining this year, Coal and Minerals Director
General Bambang Gatot told Reuters.
The world's top thermal coal exporter missed its 2015 target
by 43 percent.
"Right now we're almost at 50 percent. With the rise in coal
prices hopefully we'll reach it," Gatot told Reuters.
Given the mining sector accounts for around 4 percent of
Indonesia's GDP, any rise in revenue would be welcome news for
the government at a time when the country's fiscal deficit is
expected to widen to 2.7 percent of GDP from the 2.15 percent
In the first half of 2016, Indonesia's non-tax revenues from
mining reached 12.3 trillion rupiah, about 40 percent of the
full-year target, the finance ministry website shows.
Coal prices sank 70 percent between 2011 and 2015 amid
worries imports by top consumer China had peaked on measures to
combat pollution, and left thousands of mining pits abandoned in
After bottoming in February the Indonesian Benchmark Coal
Price (HBA) hit a two-year high of $69.07 this month, and is up
around 30 percent this year. The Asian benchmark weekly
Newcastle coal price index meanwhile, has rallied
75 percent this year to around $88.35.
The recent jump in coal prices was "good for state revenues,
and will give breathing space to coal companies that were trying
to keep running to survive," Gatot said.
Like many others in the industry, the Indonesian Coal Mining
Association said the highs may not last long and it may take
more than six months before production improves.
"(Miners) in Indonesia at least are not doing anything with
respect to production yet because they want to see stability of
prices," association chief Pandu Sjahrir told Reuters.
Indonesia's coal production will climb to 460 million tonnes
in 2017 from a forecast 440 million tonnes this year, he said.
However, with margins of up to $10 per tonne between
international and domestic coal prices, local miners were
exporting more of the fuel, Sjahrir said.
"Exports are going up," he said, estimating shipments would
grow by up to 10 million tonnes in 2016 above an earlier
forecast of 360 million tonnes. Exports in 2017 were seen at 380
million tonnes, he said.
($1 = 12,983 rupiah)
(Additional reporting by Gayatri Suroyo; Editing by Himani
Sarkar and David Evans)