Indonesia, one of the world's largest producers and exporters of thermal coal, has instituted restrictions on the export of coal, effective as of 1 October 2014, requiring that proposed exporters register with the Ministry of Trade and obtain a license to export.
At least one large Indonesian coal miner has already publicly announced that it has obtained the requisite license and, according to the Government of Indonesia, at least 98 licenses have been issued to date. Industry commentators predict that the new restrictions will reduce exports from Indonesia and potentially increase coal prices.
The new restrictions provide, among other things, a survey procedure for coal exports, which includes verification that royalties have been paid by the relevant mining company. The requirements are intended to provide an additional means for the government to prevent illegal mining activities (including unlicensed mining, mining in contravention of environmental regulations and failure to pay royalties). Additionally, government officials have indicated in public statements that the export license system may be used to impose export quotas for purposes of supporting coal prices (by reducing supply in the market) and facilitating domestic coal consumption (such as for domestic electricity generation).
The government has previously instituted policies, such as the "clean and clear" certification program, to facilitate oversight of mining companies, and has imposed a similar exporter registration and licensing program in relation to exports of ore and other unprocessed metal minerals.
Indonesia's 2009 Mining Law stipulates that the government has the authority to regulate exports of coal and minerals. The coal export restrictions were originally intended to come into effect on 1 September 2014, but the effective date was delayed to 1 October 2014 in response to industry concerns regarding the time required to process the initial licenses.
The restrictions and licensing requirements are contained in Minister of Trade Regulation No. 39/M-DAG/PER/7/2014, as amended by Regulation No. 49/M-DAG/PER/8/2014.