PT Adaro Energy, Indonesia’s no. 2 coal miner (behind PT Bumi Resources Tbk, which by contrast will send 8 million tons to China this year), stated recently that it had already contracted much of its increase sales to China of 3.5 million tons in 2009–up from roughly 2 million tons last year–while reiterating that Chinese demand for overseas thermal coal would remain “robust”.  China imported over 11.5 million tons of Indonesian coal last year–more than a quarter of its total.  Australian coal prices on the globalCOAL Newcastle index, a benchmark for Asia, ended Friday at $74.31/ton, while port coal prices at China’s top coal port Qinhuangdao remain around $92 a ton.  “As long as there is a difference between domestic and import prices, China will still be buying coal from overseas,” commented Apimuk Taifayongvichit, chief marketing and logistics planner at PT Indo Tambangraya Megah, the Indonesian unit of Thai Banpu, which noted this week that it is looking to acquire a mine in Indonesia’s Kalimantan region in order to boost production.

Indonesia is the world’s second biggest coal exporter after Australia, but has been hit hard in 2009 by falling export volumes and prices and declining domestic demand.  While the government projected earlier this year that domestic consumption would rise by nearly 30%, excess coal supplies mean that most companies will struggle to realize profit growth this year, according to Sylvia Darmaji, a mining sector analyst at PT Ciptadana Securities.  Yet Adaro’s marketing director, Alastair Grant, vehemently disagrees, stating that the firm will likely see double-digit growth in both revenue and net profit this year on the back of increased foreign demand, which comprises over 70% of its sales.

Finally, forward thinkers may want to keep an eye on political developments in Australia.  The Economist notes this week that coal industry executives there complain that Prime Minister Kevin Rudd’s promise of a carbon-emissions trading scheme would likely mean that Indonesia would be able to undercut Australia in global markets.