Indonesian coal industry risking a tough transition as demand declines, report says
HANOI, Vietnam — Indonesia's coal industry is facing mounting pressure and should diversify as China and India, its biggest customers, cut back on imports of the heavily polluting fossil fuel, according to a report from a Jakarta-based energy thinktank, Energy Shift.
The report released Tuesday says that the industry, which accounts for about 3.6 per cent of Indonesia's economic activity and employs tens of thousands of people, needs to shift toward cleaner energy now or risk being forced into a costly transition later.
Indonesia is the world's biggest exporter of coal, which is central to its economy, generating tax revenues and jobs. So the expected long-term decline in demand presents a unique challenge for the country of some 280 million. Indonesia's coal production is still rising, hitting a record 836 million tons in 2024, nearly 8 per cent more than the year before.
The industry also relies heavily on just a few buyers, with China and India buying nearly two-thirds of Indonesia's coal exports in 2023.
China still relies on coal for more than half its electricity generation. It accounted for 41 per cent of global coal imports in 2024, or nearly 543 million tons. But more than 75 per cent of the growth in demand last year was met by clean energy.
India's coal imports fell 8.4 per cent to 183.42 million metric tons from April to December 2024, down from 200.19 million metric tons in the same period a year earlier, government data shows. The drop is part of India's push to reduce import dependence by ramping up domestic coal production. Imports for industries like cement, steel and aluminum that buy coal at market rates declined 12 per cent while imports for thermal power plants fell even more sharply, down 29.8 per cent.
Indonesia's coal exports fell to a three-year low in January-April of this year, a shift that may signal a longer term decline, experts say.
'These are signs that Indonesian coal miners have to start taking seriously as well,' said Hazel Ilango of the Energy Shift Institute.
There are other risks too. Most Indonesian coal companies are tightly controlled by insiders — owners, executives, and board members — who hold about 75 per cent of company shares on average, according to the report. Regulations such as domestic supply rules and high royalties also limit profits, while access to global financing remains restricted.
The private sector and investors are generally uninterested in long-term transition plans and are more focused on immediate profits, while government policies remain inconsistent, said Putra Adhiguna of the Energy Shift Institute.
Experts say that the country's coal policy is riddled with contradictions. It has pledged to cut emissions and transition to clean energy, but it continues to expand coal production and approve new plants. Domestic subsidies keep coal cheap, but abrupt export bans have disrupted global markets. Meanwhile, the state utility plans to retire coal plants early under a $20 billion transition deal — even as new ones tied to the industry are still being built.
As major coal importers like China and India cut imports to boost their energy security, Indonesia's coal sector needs to plan ahead, said Jordan Lee, an energy transition expert at the Tony Blair Institute for Global Change in Jakarta.
'The reason I say that is basically if you look at what happened with some big oil companies that have tried something similar, we have seen the market not respond too positively,' he said.
___
Aniruddha Ghosal, The Associated Press
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
Is JD Retail Poised to Ride China's Consumer Rebound in 2025?
's JD core commerce engine, JD Retail, is gaining steady traction as China's consumption environment rebounds and consumers increasingly seek value-driven online experiences. JD Retail continues to play a central role in helping shoppers access quality products at competitive prices while offering brands a powerful and supply-chain-backed platform for scale. With rising user activity, enhanced brand partnerships and deeper category penetration, JD Retail remains the backbone of long-term growth strategy. JD Retail is expanding in high-growth areas like supermarkets, fashion, and food delivery, while reinforcing its low-price strategy. With initiatives like the RMB 200 billion 'export to domestic' program and strong momentum in food delivery, JD is confident that these moves will drive deeper engagement and support long-term growth. To support future growth, JD is accelerating AI adoption across its retail and fulfillment layers. From AI-powered shopping guides and personalized recommendations to automated ad targeting and fulfillment optimization, technology is driving efficiency and improving the experience for users and merchants. JD's 2025 618 campaign followed this playbook and broke records, with over 2.2 billion orders and more than double the number of shoppers year over year. The debut of food delivery and aggressive subsidies during 618 highlights JD's growing ecosystem scale. These efforts are translating into financial strength. In the first quarter of 2025, JD Retail generated revenues of RMB 263.8 billion (US$36.4 billion), accounting for approximately 87.7% of total revenues. With strong execution across categories and deep ecosystem integration, JD Retail looks well-positioned to ride China's consumer rebound through 2025 and beyond. JD Retail's Competition in China JD Retail faces growing competition from Alibaba BABA and PDD Holdings Inc. Sponsored ADR PDD. Alibaba's Tmall and Taobao wrapped up 618 with solid brand growth, highlighting improved merchant tools and sustained consumer demand. Alibaba's platforms emphasized quality over quantity, reflecting a shift toward healthier, service-oriented growth. PDD Holdings, meanwhile, eased its 'lowest price' rule, adopting a 'same product, same price' model to attract more brands. PDD Holdings introduced price protection guarantees and extended its 618 campaign to over a month, using subsidies and flexible pricing to deepen engagement. Both platforms are innovating aggressively to challenge JD's dominance. JD's Price Performance, Valuation and Estimates Shares of have lost 8.4% in the year-to-date (YTD) period against the Zacks Internet - Commerce industry's growth of 4.2% and the Zacks Retail-Wholesale sector's return of 2.8%. JD's YTD Price Performance Image Source: Zacks Investment Research From a valuation standpoint, JD currently trades at a forward 12-month P/E ratio of 7.75X, which is well below the industry's 24.39X. JD has a Value Score of B. JD Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for JD's second-quarter 2025 earnings is pegged at 77 cents per share, which has been revised downward by 20.6% over the past 30 days, indicating a 40.31% year-over-year decline. The Zacks Consensus Estimate for 2025 earnings is pegged at $3.81 per share, which has been revised downward by 8.6% over the past 30 days, indicating a 10.56% year-over-year decline. JD stock currently carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Inc. (JD): Free Stock Analysis Report Alibaba Group Holding Limited (BABA): Free Stock Analysis Report PDD Holdings Inc. Sponsored ADR (PDD): Free Stock Analysis Report
National Post
an hour ago
- National Post
TH Global Capital Named 'Boutique Investment Banking Firm of the Year' for the Third Year Running at the 16th Annual International M&A Awards
Article content LONDON — TH Global Capital, a global boutique investment banking firm with operations across 13 countries in the Americas, Europe, and Asia-Pacific, with a track record of closing transactions in 29 countries, has won four prestigious awards at the 16th Annual International M&A Awards, including 'Boutique Investment Banking Firm of the Year' for the third consecutive year. Article content TH Global Capital's awards include: Article content Boutique Investment Banking Firm of the Year 2025 Corporate/Strategic Deal of the Year ($50MM-$100MM): For advising Cloobees, a Global Salesforce Summit Partner in Poland, on its strategic sale to New York headquartered Synechron. Regional Deal of the Year – Asia: For advising Brainvire, a leading global Digital Commerce and Digital Marketing agency in Asia, on its merger with Said Differently, a Falfurrias portfolio company in the US. M&A Deal of the Year ($50MM–$100MM): For advising Chamonix IT and Exposé, leading Australian companies in Digital Engineering and AI & Data Science respectively, on their strategic sale to Synechron. Article content Presented by the M&A Advisor, the world's premier leadership organization for M&A, restructuring, and corporate finance professionals, these awards recognize TH Global Capital's 24-year track record, global reach, and deep cross-cultural expertise in successfully closing transactions across 29 countries. Article content 'True excellence in dealmaking is defined by clarity of vision, bold leadership, and the ability to create lasting impact,' said Roger Aguinaldo, Founder & CEO of The M&A Advisor. 'As the recipient of the Boutique Investment Banking Firm of the Year award, TH Global Capital exemplifies these qualities. We proudly celebrate TH Global Capital for their exceptional results, surpassing peers, and setting a new standard for success in today's dynamic and competitive marketplace. Article content Vivek Subramanyam Article content TH Global Capital Article content , said: 'It's a tremendous honor to win the 'Boutique Investment Banking Firm of the Year' for the third year in a row. This recognition is a testament to our relentless commitment to excellence and client success over the past 24 years. It reflects not only our team's dedication but also our ability to consistently deliver superior results in an increasingly competitive global market.' Article content Article content Article content
Globe and Mail
2 hours ago
- Globe and Mail
Why AI Stock Astera Labs Was Crushing It This Week
According to data compiled by S&P Global Market Intelligence, Astera Labs (NASDAQ: ALAB) stock's price was floating almost 11% higher week to date on early Friday morning. Investors were mainly reacting to news the tech infrastructure company reported about a new business tie-up with an Asian peer. A cross-Pacific Ocean partnership On Monday, Astera and Taiwanese chipmaker AIChip Technologies announced in a joint press release that they have formed a strategic business partnership. Together, the two will aim to exploit opportunities afforded by sky-high demand for artificial intelligence (AI) functionalities. AIChip, which specializes in application-specific integrated circuit (ASIC) chips, and Astera are teaming up to offer "validated, interoperable solutions for hyperscalers building next-generation AI infrastructure," according to the press release. As the name suggests, a hyperscaler is essentially an extremely large data center. These are in vogue now due to the heavy resource requirements of AI. Aiming to reap a bundle from AI Astera and AIChip offered almost no details about their new partnership, including its financial parameters. Given that, it's tough to gauge how this collaboration might affect their fundamentals. Judging by the market's reaction, though, investors don't seem to mind -- teaming up on projects has clear potential to benefit both companies. I think AI companies like Astera are in the midst of a gold rush. I'd absolutely consider buying the stock. Should you invest $1,000 in Astera Labs right now? Before you buy stock in Astera Labs, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Astera Labs wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor 's total average return is995% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
