Can Indonesia's coal mines maximise strip ratios and boost reserves?

The declining trend in strip ratios for Indonesia's coal mines have allowed producers to survive in periods of lower coal prices through reduction in production costs and margins. However, producers are likely to have sterilised coal and jeopardised future coal reserves with continuous mining in lower strip areas. Our analysis suggests that the top 16 producers in Indonesia has been able to increase reserve, but other coal producers have experienced a declining trend in reserve reduction and is expected to lose 364 Mt in 2016. With concerns of Indonesia running out of reserves to fulfil domestic obligations, we seek to understand Indonesia's coal mines potential to maximise strip ratios and boost reserves. In this insight, we analysed the breakeven strip ratios for currently operating surface mines in Indonesia and its potential impact to reserves.