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Indonesia Reviewing Domestic Market Coal Obligation Rules

Coal News - Published on Wed, 04 Dec 2019

Image Source: Coal Indonesia
Reuters reported that Indonesia is reviewing rules that require coal miners to sell a portion of their coal to local buyers. Ministry of Energy and Mineral Resources coal and minerals director general Mr Bambang Gatot Ariyono said “We are thinking of ways to avoid harming the domestic sector, but still takes care of exports. The changes are aimed at finding the balance between domestic obligation and exports. The government will also draft new regulations to support its agenda of building a downstream industry for coal.”

However Indonesian Coal Mining Association Chairman Mr Pandu Sjahrir said that “Domestic coal consumption remains unchanged at 120 million tonnes a year while output is climbing to 600 million tonnes. If the government wants to keep the 25% DMO, output should be capped at 480 million tonnes.”

Indonesian coal miners are currently required to sell 25% of their output to the local market, mainly state-owned electric company PT Perusahaan Listrik Negara, a policy known as the domestic market obligation. However, since PLN’s demand is limited while output is climbing, the miners are unable to maintain the ratio of exports to domestic sales.

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Posted By : Arun Huidrom on Wed, 04 Dec 2019
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