Indonesia, the world's top thermal coal exporter, could increase production of the fuel used in power stations by 5 percent in 2017 and 2018, the country's leading coal industry association said on Sunday. Indonesia's coal industry has benefited from higher prices this year after a downturn in 2015 and 2016 put many small producers out of business, though recent price declines could signal more difficulties ahead.

"For production, I would say flat to up 5 percent," Indonesian Coal Mining Association Chairman Pandu Sjahrir said on the sidelines of the Coaltrans Asia conference in Bali, referring to 2017 and 2018 output without detailing numbers. In October Sjahrir said Indonesia's coal production could reach 460 million tonnes in 2017, up from an estimated 440 million tonnes last year, because of improving prices. However, output from Indonesia is likely be limited as many of the country's largest producers divert capital towards power station projects rather than expansions, Sjahrir added.

Copyright Reuters, 2017