The Indonesian government has set domestic market obligation (DMO) at 128 MnT in CY19, Kontan reported citing official at the Mines and Energy Ministry.
Domestic Market Obligation which represents the total amount of coal to be sold by the Indonesian coal miners in domestic market, has been set 5.7% higher Y-o-Y from its previous year mark of 121 MnT.
“Since more power plants will start operations this year, then they need more coal. The need for state electricity company PLN alone this year at 95.7 MnT,” said Agung Pribadi, head of communication at the energy ministry.
The remaining share of DMO would be procured by other industries such as fertiliser, cement etc.
Media reports suggested that total coal production by the Indonesian coal producers would hit 490 MnT in CY19, way lower than the 585 MnT they produced last year.
Director General for Mineral and Coal, Bambang Gatot Ariyono, attributed the lowering of coal production target this year due to failure by some small-scale coal producers which did not meet their domestic market obligation. It was reported coal companies that failed to attain their output target were penalised by the government.
The government has refused to offer license to such companies to produce coal which could result in decline of coal production this year.
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