Indonesia's Ministry of Trade has decided to delay the implementation of its coal export license regulation to October 1 from September 1, to provide additional time for more license applications to be processed, a ministry official said Friday, August 22.
On August 21, trade minister Muhammad Lutfi formally issued a revision to a July 15 ministerial regulation, compelling Indonesian thermal and metallurgical coal exporters to secure a license with the ministry before they export.
Coal industry players had called for a postponement in the implementation of the regulation, expressing concern about the lack of clarity regarding the process of obtaining a license, and fearing it could result in costly demurrage charges if it led to ships being delayed.
Before the new deadline was set, there were concerns that Indonesian coal exports may be hit in the near-term with miners struggling to meet the September 1 deadline to obtain their export licenses from the trade ministry, market sources had said.
Gultom Guska, deputy coal director at the Ministry of Energy and Mineral Resources Directorate for Coal and Minerals, on Thursday said there was still a long list of coal export license applications that need to be processed.
Guska also clarified that coal miners with a "clean and clear certificate" would automatically be granted an export license by the trade ministry.
Issued by the central government, the certificate is an indication that the mine has no outstanding royalty and other government debt obligation, has fulfilled its exploration and environmental commitments, has no property delineation issues and has obtained forestry permits.
PROCESS OF OBTAINING LICENSE UNCLEAR
The lack of clarity on the process of obtaining the license is an ongoing issue, sources said.
A Central Kalimantan coal miner said that it is his understanding that a "recommendation" from the energy ministry is still required to be able to obtain an export license.
An Indonesia-based trader on Thursday said he was still in the process of getting the "clean and clear certificate" from the central government, to be able to secure a "recommendation letter" from the Ministry of Energy and Mining Resources.
He added that there was confusion about the process of obtaining an export license, preventing him from offering any thermal coal cargoes until there is further clarity.
The trader said he has moved his spot cargo offers to October, hoping that that by that time, "things will be clearer."
He also noted that other traders must secure a "clean and clear certificate" to be able to get a recommendation letter from the energy ministry in order to proceed with securing an export license from the trade ministry.
TOUGH FOR IUP MINING LICENSE HOLDERS
Guska said most major Indonesian coal producers, already holding a Contract of Work, have a "clean and clear" certification and these miners should be able to receive their export licenses on time.
But there are more than 1,000 applications for the certification, from miners holding a mining license known as an IUP.
Those with the IUP license mainly comprise smaller local miners. Guska pointed out that so far only about 85 "clean and clear certificates" have been issued to IUP miners.
A junior energy ministry official, however, told Platts in February that there are about 2,500 miners in total in Indonesia that have been allowed to produce coal, and each has to secure a "clean and clear" certification.
The Central Kalimantan miner also said one of the advantages from the implementation of coal export licenses, is that miners wanting to obtain these licences are now forced to move quickly to comply with Indonesia's new requirements on curbing illegal coal mining.
A second Indonesian coal producer with mines in East Kalimantan and South Kalimantan said: "Indonesian authorities are now very strict.
The new regulations are very difficult for us. But it is understandable because the government really wants to take out all the illegal miners and to collect the royalties."
