Bukit Asam Tbk PT (IDX: PTBA) claimed to have fulfilled this year’s mandatory coal domestic market obligation (DMO) quota to domestically sell 25% of its coal output until the third quarter, Kontan news agency reported today citing the company’s corporate secretary, Suherman.
Suherman stated that the state-owned company has sold 11.91 million tonnes (MnT) of coal for the purpose of meeting the DMO quota set by the government.
PTBA’s total coal production has reached 21.6 MnT in the first nine months of this year. The company is aiming for a total coal production target of 28.5 MnT by the end of this calender year.
Notably, Bukit Asam is the first company to have publicly revealed its domestic market obligation. The other Indonesian coal miners are likely to make similar announcements in the coming days.
The Indonesian government applied the domestic market obligation (DMO), introduced just before the elections last year in March 2018, to ensure that domestic requirements for the nation’s electricity supply are met before the country’s coal cargoes are diverted to the seaborne export market because of higher price realizations.
The DMO policy mandates local coal mining companies to allocate at least 25% of their annual production for domestic buyers — with much of this coal delivered to coal-fired power plants, mainly operated by state-run power utility firm PT Perusahaan Listrik Negara (PLN).
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