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Jakarta Post

Government increases domestic allocation requirement for coal

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, February 14, 2019   /   05:44 pm
Government increases domestic allocation requirement for coal A field officer monitors heavy equipment at an open pit belonging to coal miner PT Bukit Asam. (Courtesy of/www.ptba.co.id)

The Indonesian government is requiring coal miners to increase their allocation of coal for the domestic market this year to 128 million tons, an increase of 5.79 percent over 2018’s requirement of 121 million tons.

Energy and Mineral Resources Ministry spokesman Agung Pribadi said in Jakarta on Wednesday that the increased domestic market obligation (DMO) was in line with the projected increase in demand.

“The domestic demand for electricity and manufacturing will increase this year,” said Agung as quoted by kontan.co.id, adding that more power plants would operate this year, boosting demand for the commodity.

Meanwhile, Mineral and Coal Director General Bambang Gatot Ariyono said on Wednesday that the government had agreed to a working budget (RKAB) for the mineral and coal subsector for 2019.

In the RKAB, the coal production target was set at 489.12 million tons, a 0.85 percent increase from the target of 485 million tons in 2017. However, the production realization is estimated to decline by 7.36 percent from 2018’s 528 million tons.

Meanwhile, the 128 million ton DMO target is equal to 26.12 percent of the total production target in this year’s RKAB.

The ministry explained that 95.73 million tons of DMO coal would be used for electricity, 5.4 million tons for metallurgy, 1.49 million tons for fertilizers, 16.15 million tons for the cement industry, 3 million tons for the textile industry, 6.2 million tons for the paper industry and 14.500 million tons for brackets.

Last year, the government set a 121 million ton DMO coal target, however the realization reached just 115.09 million tons. (bbn)