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Jakarta Post

Indonesia sets lower coal production target to help stabilize global price

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Tue, January 8, 2019   /   11:01 am
Indonesia sets lower coal production target to help stabilize global price A bulk freighter carrying coal cruises through the Musi River in Palembang, South Sumatra, on Jan. 3. (Antara/Nova Wahyudi)

The government has lowered its coal production target for this year to 480 million tons in an effort to stabilize the global coal price, an official has said.

Last year’s target was 485 million tons, 25 percent of which was allocated to the domestic market obligation (DMO).

Energy and Mineral Resources Ministry mineral and coal director general Bambang Gatot Ariyono said the government considered various factors before deciding on the figure, including the movement of the US dollar.

“The goal is to maintain a good coal price,” he said, adding that there were possibilities that the government might revise the production target this year.

“We will continue to oversee the situation. Usually, coal miners will revise their production target no later than July.”

One of the reasons to revise the target was to increase state revenue, he added.

Ministry data from up to Dec. 27 shows that Indonesia reached 94.02 percent of its annual total target for 2018.

Bambang assured that a 25 percent DMO policy and a coal price cap of US$70 per ton would ensure stable electricity tariffs until the year-end. (bbn)