ENERGY - Chinese Ban, Higher Royalties Could Dethrone King Coal In Indonesia

Indonesia's coal exports have anchored a multi-year growth spurt, but the party may be over. Prices for thermal coal recently touched a three-year low of below $90/ton, a far cry from their post-2008 rebound on the back of demand from China and India. At this price, some producers are digging coal at a loss. In addition to soft global prices, Indonesian miners face two regulatory threats. The first is China's proposed import ban on low-quality coal, which Chinese utilities are resisting but which has the support of domestic producers. Around one-fifth of annual imports, or 50m tons, would be banned, the FT reports. Naturally the proposed ban is welcomed by struggling Chinese miners who are located inland, far from the coastal cities where electricity demand is highest and seaborne imports are often cheaper to source. By burning less low-grade coal, China can reduce emissions and start to tackle its foul air (Beijing's current pollution reading: Unhealthy). Domestic coal would also be subject to a lower quality cut-off.

http://www.forbes.com/sites/simonmontlake/2013/06/13/chinese-ban-highe