March 28, 2012 / 2:08 AM / 8 years ago

UPDATE 1-Indonesia 2012 coal output seen rising by up to 5 pct -association

* Indonesia 2012 coal output seen to rise to 380-390 mln T

* Domestic consumption to rise to 75 mln T in 2012 (Adds comment, background, details)

By Lewa Pardomuan

SINGAPORE, March 28 (Reuters) - Indonesia’s coal production in 2012 is expected to rise up to 5 percent from a year earlier to 390 million tonnes, despite price declines, a senior industry group official said on Wednesday.

“This year we estimate that production will reach 380-390 million tonnes even though prices have gone down,” said Supriatna Suhala, deputy chairman and executive director of the APBI-Indonesia Coal Mining Association.

“The decline in prices is not too worrying.”

Indonesia, the world’s top thermal coal exporter, produced 370 million tonnes of coal in 2011, he added.

The benchmark thermal coal prices on the globalCOAL Newcastle index has lost nearly 9 percent so far this year, as demand from key consumers in the region, including China, Japan and India, has waned.

Suhala also forecast that Indonesia’s domestic coal consumption would jump 15 percent on the year to 75 million tonnes in 2012.

“This year’s (domestic) consumption is likely to rise to 75 million tonnes, because new power plants are coming on stream,” Suhala said, adding that last year’s domestic consumption was 65 million tonnes.

Indonesia, a major global producer of raw materials including coal, copper, tin and nickel, is in the spotlight after the government announced a new mining law requiring foreign firms to sell down stakes in mines by the 10th year of production and limiting foreign ownership in mines to no more than 49 percent. (Reporting by Lewa Pardomuan; Writing by Rujun Shen; Editing by Ed Davies)

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