Indonesia, world’s biggest thermal Coal exporter has decided to stick to its protective asset policies, Australia, the second biggest exporter of the commodity thinks it’ll be in an advantageous position in the global seaborne trade of thermal Coal.
With 35 per cent share Indonesia is the largest thermal Coal exporter in the world followed by Australia with 18per cent market share. But after the new polices of Indonesia being into force from January 2014, it is expected that the Asian country will lose its dominance in the world seaborne trade of Thermal coal, paving the way for Australia’s advancement in this sector.
“Yes, we think so. We’ll be in a advantageous position given our high quality thermal Coal and our trade-friendly policies as compared to our competitors”, said Tom Calder, Trade Commissioner for the Australian Trade Commission, New Delhi.
He also added that, the Australian Government is trying to keep its mineral policies more trade friendly.
Starting from 12 Jan, 2014, the export of all mineral ores will be banned in Indonesia. This controversial new policy, stipulated by the 2009 Mining Law (on Minerals and Coal Mining), was agreed upon by the nine fractions in Commission VII of the Indonesian parliament (DPR) on 5th of this month. Through this new law, the government intends to increase the value of exports while reducing dependence on raw exports and thus becoming less vulnerable to price downswings on the global commodities market.
Another challenge to Indonesia’s producers will be declining quality of Coal reserves and an increase in production costs.