Coal Export to Resume for Producers That Have Met DMO

TheIndonesia.id - The Indonesian government has decided to re-allow the export of coal by Indonesia producers, but it will prioritize miners who have fulfilled 100 percent of their domestic market obligation, or DMO.

Minister of Energy and Mineral Resources Arifin Tasrif said the remaining coal producers who have yet to meet the obligation must need to wait before restarting their export activities.

“Producers who have fulfilled 100 percent of DMO will be granted priority while companies that haven’t must meet the obligation first,” Tasrif confirmed during a press conference in Jakarta on Wednesday, January 12.

In the occasion, he also explained that the Indonesian government first required the fulfillment of DMO in 2014, in which coal producers are obliged to supply 25 percent from total production for national consumption, while the remaining 75 percent can be exported for commercial purpose.

In 2021, total coal production in Indonesia was 614 million tons, with 240 million tons of which were used for power plants. According to the Minister, if all producers can remain committed to fulfill the commitment, Indonesia won’t be at risk of energy crisis because domestic consumption is only a fourth of total production, or equivalent to 150 million tons.

Previously, Ministry of Energy and Mineral Resources announced that it would “temporarily ban” coal export from January 1 to 31, 2022, as it aimed to fulfill national supply for power plants.

The Ministry deemed the step urgent as millions of customers in Indonesia will be at the risk of experiencing outage.

“If the ban isn't enforced, almost 20 power plants with a power of about 10,850 megawatt will be out. This will potentially disturb the stability of national economy. When supplies are met, business can be back to normal, everyone can export. We'll evaluate it after 5 January 2022," director general of mineral and coal at the Ministry, Ridwan Jamaludin, said in a statement on January 1.

Prior to making the decision, he said the government had repeatedly warned coal miners to fulfill their coal supply commitment to state-owned power company PLN, but to no avail.

"Of the 5.1 million metric tons (MT) assigned by the government, as of January 1, 2022, only 35,000 MT or less than 1% is met. This amount cannot meet the demands of all power plants," Jamaludin explained.