The Coal Trader

Indonesia looking towards underground capacity as reserves shrink

According to foreign media reports, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) is actively seeking to increase investment in the country’s underground coal resource mining to develop high-quality coal resources in deeper coal seams.

Due to years of open-pit mining, Indonesia’s high-calorie coal reserves have been declining, so the country plans to increase coal production to achieve a production target of 710 million tons in 2024.

The Indonesian Ministry of Energy and Mineral Resources recently stated that since 2023 (as of December 27), Indonesia has produced a total of 751.58 million tons of coal, completing 108.22% of this year’s production target of 694.5 million tons. However, according to industry insiders, actual production this year may be higher.

In recent years, Indonesian miners have gradually turned to underground mining due to the limitations of open-pit mining, such as stripping ratio restrictions, rising mining costs, and increasingly stringent related environmental regulations.

Although underground coal mining requires higher upfront investment and operating costs, it also has the advantages of direct access to coal seams, reduced waste generation, and less disturbance to the underlying surface environment.

Despite the higher costs, the Indonesian government is gradually realizing that upgrading mining technology can help reduce the operating expenses associated with underground mining. The government expects underground mining to trend upward as open-pit coal reserves continue to decline.

Currently, there are many coal companies operating underground coal mines in Indonesia, including PT Sumber Daya Energi (SDE), PT Merge Mining Industri and PT Kusuma Raya Utama.