Indonesian coal miners and associated industry players have called on the Energy and Mineral Resources Ministry to revise the price of coal sold to the country’s government-owned electricity utility corporation PT Perusahaan Listrik Negara (PLN) under the domestic market obligation (DMO) scheme.
The Indonesian government’s DMO scheme obligates local coal miners to supply part of their production to the domestic market, specifically to coal-fired power plants, in consideration of the need for an increase in the nation’s electricity supply.
Currently, the price for coal sold to PLN under the DMO scheme has been capped at USD 70 per metric ton (MT), while the coal benchmark price (HBA) set by the government is below the USD 70/MT level.
“The DMO pricing was meant to help finance PLN, but now that PLN has made profit, then the benchmark price of USD 70/MT is no longer relevant,” stated Hendra Sinadia, excutive director of Indonesian Coal Mining Association (APBI).
However, Bambang Gatot Ariyono, director general of mineral and coal at the Energy Ministry has yet to respond to the request made by the association, Kontan newspaper reported.
Also, the Energy and Mineral Resources’ Minister Arifin Tasrif has not made any remarks on the recent call by industry players and coal producers.
Meanwhile, the government has set its latest thermal coal benchmark price at USD 64.80/MT in October this year, which’s the lowest since October 2016.
It is pertinent to mention that the price revision for coal sales under DMO scheme has been a longstanding demand raised by the country’s coal producers taking into account the weak market condition of the Indonesian coal mining industry.
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