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View all search resultsCoal miners demand price review as govt mulls higher DMO quota
Mining firms are urging the government to revise the domestic coal price benchmark, arguing that rising production costs make the current domestic market obligation (DMO) scheme unviable, even as authorities consider raising the mandatory sales quota.
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A barge carries coal at the dock next to the Suralaya coal-fired power plant on Oct. 31, 2023, in Cilegon, Banten (AFP/Ronald Siagian)
M
ining firms are urging the government to increase the domestic coal price benchmark, arguing that rising production costs make the current domestic market obligation (DMO) scheme unviable, even as authorities consider raising the mandatory sales quota.
The Energy and Mineral Resources Ministry is mulling over a plan to increase the DMO share beyond the current 25 percent of production.
Energy Minister Bahlil Lahadalia revealed that the government was reviewing revisions to the work plan and budget (RKAB) mechanism, which includes the DMO provisions.
The current 25 percent DMO, which obliges firms to sell at least a quarter of their output on the domestic market, is stipulated under Energy and Mineral Resources Ministry Decree No. 267.K/MB.01/MEM.B/2022.
In addition to the volume mandate, the government has maintained a price of US$70 per tonne for coal supplied to state-owned utility PLN, a fixed rate that has been in place for seven years.
Gita Mahyarani, the acting executive director of the Indonesian Coal Mining Association (APBI), says that, while miners meet the legal DMO requirement, the pricing model needs to be reviewed and adjusted.
In the past two years, domestic coal sales reached around 27 percent of total production, surpassing the 25 percent DMO quota.
