Indonesia mulls raising coal DMO to 30 percent

A worker stands on the back of a truck loaded with coal at Karya Citra Nusantara (KCN) Marunda Port in Jakarta on Jan. 17, after Indonesia eased an export ban on the commodity.(Photo: AFP)

Jakarta (VNA) – Indonesia’s Ministry of Energy and Mineral Resources (EMR) is mulling over a proposal to raise the domestic market obligation (DMO) for coal from 25 percent to 30 percent of total production to anticipate rising domestic demand, Minister Arifin Tasrif has said.

He said that the government was "monitoring the domestic electricity sector and industries’ demand" to make a decision.

Earlier at the hearing with the EMR on January 13, Committee VII of the House of Representatives, which oversees the energy and mining sectors, suggested increasing DMO to 30 percent of total output to meet coal consumption demand.

The committee's chairman Sugeng Suparwoto said that increasing the DMO ratio is very important" as coal-fired power plants with an estimated total capacity of 35,000 MW will start operating in the next few years, raising coal consumption of domestic thermal power plants to about 175 million tonnes per year.

The plan to raise the DMO ratio was carried out after the government issued a month-long ban on coal exports on January 1 to solve the shortage of reserves of the National State Electric Power Company (PLN).

The ban has caused coal prices in China and Australia to increase sharply. Currently, the Coordinating Ministry of Maritime and Investment Affairs, Ministry of Trade, EMR and PLN are determining measures to ensure DMO compliance over the long term.

The EMR's figures showed that the DMO for coal reached 133 million tonnes last year, or 96 percent of the target level, while total production hit  614 million tonnes, or 98 percent of the target level of 625 million tonnes. The electricity, metallurgy and cement sectors consumed 112.13 million tonnes, 11.39 million tonnes and 4.45 million tonnes, respectively, of the total amount implemented by DMO./.