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Jakarta Post

Govt brings in domestic coal market obligation

  • Alfian

  /   Fri, January 15 2010   /  10:18 am

The Energy and Mineral Resources Ministry has issued a ministerial decree requiring producers of coal and other minerals to allocate a proportion of their annual production output to the domestic market, or face sanctions.The decree, signed on Dec. 31, 2009, states that the proportion for the so called annual domestic market obligation (DMO) will be equal to the estimate of annual demand proposed by potential domestic buyers a year earlier.Both the producers and domestic consumers are bound to the DMO and failure to comply will result in sanctions. Sanctions will vary from a written reprimand to a production cut of up to 50 percent for producers, and up to 50 percent supply reduction for consumers in the following year if they failed to purchase the commodity at the agreed volume.The DMO obligation was initially to be introduced through the im-plementing regulations of the Mining Law.“...