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Govt to use carrot, stick in coal DMO policy
Indonesia will lift the coal export ban for mining companies that have met their domestic market obligations (DMOs) to ensure supplies for state electricity company PLN.
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Heavy equipment is used to move coal at the Kertapati coal terminal belonging to state-owned PT Bukit Asam in Palembang, South Sumatra, in this undated photograph. (Antara/Nova Wahyudi)
T
he government has announced it will lift the coal export ban for some companies as the supply situation at state-owned electricity company PLN is improving.
The Office of the Coordinating Maritime Affairs and Investment Minister said on Wednesday that PLN had reported in a coordination meeting that it had secured 15 days’ worth of supply for its coal-fired power plants and that the government would therefore allow 37 coal-loaded vessels to depart for export markets.
“[The implementation of this regulation] has to be monitored collectively so that [we can] improve domestic governance and prevent similar [crises] in the future,” Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said in a statement.
Indonesia, the world’s biggest thermal coal exporter, began on Jan. 1 what it said would be a month-long ban on coal shipments to address a shortage in PLN’s coal stocks that could have led to widespread blackouts.
The ban drove coal prices in China and Australia higher last week, while scores of vessels slated to carry coal to major buying markets, such as Japan, China, South Korea and India, have been in limbo off Kalimantan, home to Indonesia’s main coal ports.
Read also: PLN’s coal shortage over, ministers say
The meeting, which was also attended by the Trade Ministry and the Development Finance Comptroller (BPKP), determined that coal companies that had fully met their 2021 domestic market obligations (DMOs) and contractual obligations to PLN could resume exports in 2022.
