Indonesia's energy ministry is conducting an inspection on domestic metallurgical coal resources as it looks to boost value from the commodity beyond its traditional role as a thermal fuel.

The move comes as the government aims to maximize coal's contribution to the economy while transitioning to renewable sources under its net zero emissions goal by 2060.

Muhammad Wafid, head of the Mining Resources Agency at the Energy and Mineral Resources Ministry, said metallurgical coal can be used in steelmaking and mineral processing industries at competitive prices versus thermal coal.

"Previously, Indonesia sold its coal solely as thermal coal, but some varieties have characteristics making them suitable as metallurgical coal for steel and mineral smelting," he said on December 14.

Indonesia has significant coal reserves that could still be tapped for industries like steel and smelting as it pursues net zero, Wafid said. The country has estimated resources of 98.5 billion tonnes and proven reserves of 33.8 billion tonnes.

Some see coal facing a sunset as renewables expand, but Wafid said metallurgical coal will still be needed to achieve net zero and advance mineral processing globally.

The government is targeting coal output of 694.5 million tonnes this year, up from 663 million tonnes previously. Production reached 686 million tonnes by November 27, signaling the full-year goal could be surpassed.

Indonesia produced a record 687.43 million tonnes of coal in 2022, with 465 million tonnes exported.

(Writing by Alex Guo  Editing by Harry Huo)
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