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Indonesian coal production to slow as cash runs out

INDONESIAN coal miners are diversifying into other businesses to offset a collapse in demand from China, which has slashed their cash flows to the lowest levels in months.

Data from Thompson Reuters shows the free cash flow of the 15 biggest coal miners and contractors on Jakarta’s stock exchange averaged $10.7 million in the three months ended December, which is the lowest it has been since January-March, 2014.

Company executives and industry groups are not expecting a pickup anytime soon in demand especially from China, the world’s top consumer of the commodity.

Indonesia’s coal production may slide as much as 24% this year as miners slow output and concentrate on stabilising their businesses, chairman of the Indonesian Coal Mining Association Pandu Sjahrir said.

“The Chinese slowdown is worse than we thought. India and Japan have improved. The problem is that China overpowers everyone else,” he said.

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