Coal miners in Indonesia failing to meet their respective coal domestic market obligation (DMO) quota may have to pay financial penalty of up to USD 1.5 per ton to the government.
Irwandy Arif, special advisor to the Minister of Energy and Mineral Resources for Mineral and Coal Governance Acceleration, said on Wednesday that the Ministry of Energy and Mineral Resources is currently drafting a new ministerial regulation on the financial penalty, which replaces the previous production cut sanction.
“There will be a new (ministerial regulation) on compensation (financial penalty). If I’m not mistaken, for (coal miners producing) low calorie (coal), the (financial) penalty is USD 0.5 per ton… For medium calorie the compensation (penalty) is USD 1 per ton, and for high calorie coal is USD 1.5 per ton,” he said at a seminar on Mining Economics in Jakarta.
Under existing regulation, coal miners are required to allocate at least 25 percent of their annual production for the domestic market including for power plants and other industries.
Under the previous policy, coal miners failing to meet the DMO quota would see their coal production volume in the following year reduced by the government.
Minister of Energy and Mineral Resources Arifin Tasrif issued a new decree late last year, replacing the production cut sanction with financial penalty, but there were no details yet on the size of the financial penalty that must be paid by coal miners which are unable to meet the DMO quota.
Director General of Mineral and Coal at the ministry, Bambang Gatot Ariyono said in January the government decided to change the sanction to financial penalty as imposing a production cut is much more difficult considering the various consequences including impact on government revenue and social problem.
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