RPT-UPDATE 2-New rules to slash Indonesian coal exports in short term at least – by Wilda Asmarini and Yayat Supriatna (Reuters India – October 1, 2014)

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JAKARTA, Sept 30 (Reuters) – Indonesia’s coal exports are expected to fall by between 15 and 20 percent in October from September and could decline 5 percent this year as firms scramble to obtain government export permits to comply with new rules due to come into effect on Oct. 1.

The new regulations, intended to stamp out illegal mining and ensure ample coal supplies for domestic power plants, require exporters to get approval from the mining and trade ministries.

But the industry says the rules are poorly timed and could push many firms out of business with coal prices at a five-year low. Unregistered firms will not be allowed to ship coal past the deadline.

Many miners and traders have encountered delays and a backlog of firms have yet to be registered, Pandu Sjahrir, chairman of the commercial committee at the Indonesian Coal Mining Association (ICMA), told Reuters.

“A lot of the backlog happens to be at the coal and minerals directorate level. Everything has to be done manually,” Sjahrir said, adding that firms needed to obtain the signature of each director at the department.

“A couple of major firms haven’t completed registration,” he said, without naming the firms but adding that this year’s exports could decline by up to 5 percent as a result. He could not say how long it would take for exports to recover.

Indonesia, the world’s top thermal coal exporter, shipped between 25 million and 30 million tonnes of coal in September, according to the ICMA.

Previously, the ICMA had said it expected shipments to drop 14 percent to 300 million tonnes in 2015 as a result of the new rules, coupled with China’s import restrictions.

The association’s requests to the government to postpone implementation of the rules to give firms more time to adjust had been denied, ICMA chairman Bob Kamandanu told Reuters.

“They just said they would go ahead … They have to give us some sort of leeway. (New rules) cannot be just created like this,” Kamandanu said.

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