BI: Coal Mining Activities in East Kalimantan are Still Growing Significantly Due to Increasing Demand from China and India

Illustration. (Photo: Doc. Antara)

JAKARTA - Head of Bank Indonesia East Kalimantan Province Representative Office (BI Kaltim) estimates that economic growth from mining, especially the coal subsector in East Kalimantan, will still increase this year, due to increasing demand from China and India.

"East Kalimantan's economic growth in 2024 is estimated to still be dominated by the mining and quarrying business sector, especially from coal in line with strong export market demand, especially demand from China and India," said Head of BI East Kalimantan Budi Widihartanto in Samarinda, quoted by Antara, Wednesday, May 29.

Demand for coal from China and India has increased because the weather in these two countries is too hot, so they require more air conditioning than usual, the impact of which then requires more fuel or energy sources to supply electricity.

On the other hand, the relatively limited coal production in these two countries is also not enough to meet domestic needs, coupled with the still high price of coal in the domestic markets of India and China.

Another factor in the estimated increase in coal growth in East Kalimantan is that mining companies have submitted work plans to produce 970 million tonnes of coal, much higher than the government's target for this year of 750 million tonnes.

Meanwhile, apart from the government policy regarding Domestic Market Obligation (DMO) of 25 percent of coal production for domestic needs, especially for power plants by selling coal to PT PLN, various domestic industries still need coal to meet internal needs. company.

"There are still a number of large domestic industries that need coal, including the various indicators mentioned above, so we estimate that the coal business field will still have a large contribution to East Kalimantan's economic growth this year," he said.

Meanwhile, East Kalimantan's Gross Regional Domestic Product (GRDP) in quarter 1 - 2024 based on current prices reached IDR 208.15 trillion, while GRDP at constant prices was IDR 139.02 trillion.

There are five business fields that dominate East Kalimantan's economic growth, namely mining and quarrying with a share of 39.57 percent, processing industry 18.40 percent, construction 11.46 percent, agriculture in the broadest sense 8.51 percent, wholesale and retail trade, repairs cars and motorbikes with a share of 6.79 percent.