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Govt to cap coal prices for domestic cement, fertilizer industries
The Energy and Mineral Resources Ministry has capped the coal price at $90 per ton for the domestic cement and fertilizer industry.
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Coal is unloaded from a barge at the Suralaya coal power plant in Cilegon, Banten, on Sept. 22, 2021. (AFP/Ronald Siagian)
T
he Energy and Mineral Resources Ministry has capped the coal price at US$90 per ton for the domestic cement and fertilizer industry.
Stipulated in Energy Ministry decree No. 206/2021 on the coal sales price to satisfy the cement and fertilizer industries’ demand for raw material and fuels, the regulation is effective from Nov. 1 until Mar. 31 next year.
Previously, under the domestic market obligation (DMO) policy, the coal price was capped only for the electricity sector, namely at $70 per ton, while cement and fertilizer producers paid market prices.
Under the DMO, coal companies are required to reserve 25 percent of their output for domestic needs. Furthermore, of the amount supplied domestically, 80 percent must be allocated to the electricity sector, and the remainder can be for other industries, including cement and fertilizer.
Agung Wiharto, senior vice president corporate communications at publicly listed PT Solusi Bangun Indonesia, a subsidiary of state-owned cement producer Semen Indonesia, told The Jakarta Post that the regulation would provide certainty for businesses.
“[The regulation] will ensure cement supply for national infrastructure [projects] and help other construction sectors,” he said on Friday.
Indonesian Cement Association (ASI) chairman Widodo Santoso told CNBC Indonesia on Oct. 25 that several cement factories had ceased operations due to declining coal supply and soaring coal prices and suggested the government introduce a DMO for coal sold to cement producers.
