COAL TRADE BETWEEN INDONESIA AND MALAYSIA, 2010-2013

Abstract

Coal is the natural resource that is scattered in the various parts of world. Its large availability has made coal as one of the primary energy sources that plays an important role to fulfill the electricity supply and to boost the industry's production. Indonesia is one of the largest countries that endowed by the abundant coal resources and reserves, primarily located in Kalimantan and Sumatera province. Indonesian coal product, thermal coal, has been well-known all over the world, especially in the Asian region that its coal sales is higher compared to the other regions such as United States, Middle East and Europe. Malaysia is the largest coal importer in Southeast Asia that fulfills its coal supply from Indonesia. It is definitely the opportunity for both countries to strengthen and to enlarge the scope of economic cooperation. In fact, the increasing on electricity demand becomes one of the factors that influence the increasing on coal demand in Malaysia. The Malaysia's government efforts in providing the efficient and affordable energy has encouraged the raising towards coal utilization as the energy source. The objective of this research is to figure out the determinant factors in strengthening the coal trade relations between the country of Indonesia and Malaysia. Based on the research, there are several supporting factors that makes the economic cooperation in the coal trade is very important.