COALspot.com - The Indonesian government has declared the quantity of coal to be supplied to domestic market in 2013 recently under DMO regulation. According to media reports, the government has sets 74.30 million tons of coal under domestic market obligation (DMO) in 2013. The 2013,  DMO volume is equivalent to 20.30 percent of the target production volume or is around 337 million tons to 366.04 million tons forecasted production level.

Year 2012, government has forecasted to produce around 332 million tons, but in 2013, the forecasted production level of coal has increased at least by 10.24 percent. However DMO allocation for next year has dropped by 9.44 percent compared to the DMO of this year. Government has asked the selected coal producers to allocate 82.02 million tones coal in 2012, where’s next year, government has sets only around 74.30 million tons.

According to media reports, director general of mineral and coal ministry of energy and mineral resources (ESDM), Sihite Thamrin said the DMO obligation will be applicable only for 74 coal producers

However he also indicated that, the companies do not meet DMO sales, will receive sanctions from mining department. However he has not disclosed, the mode of sanction that, the companies may receive against non fulfillment of DMO from the ministry.

The obligation to sell coal to the domestic market in 2013 has regulated by a ministerial Decree No. 2934 / 2012.  The decree said that, as many as 28 mining business license (IUP) holders are required to set aside as much as 10.31 percent of their total coal production for domestic needs in 2013.

In the meanwhile, 45 coal contract of works (PKP2B or CCoW) holder were required to allocate total 61.76 million tons of coal to domestic market under DMO obligation in 2013. The state-owned coal miner PT Bukit Asam Tbk is expected to allocate 2.2 million tons in 2013 to domestic market.

According to decree signed by Minister of Energy and Mineral Resources Jero Wacik on October 8, Indonesia’s largest coal producers such as PT Adaro Indonesia, and PT Kaltim Prima Coal  will allocate 10.15 million tons and 10.76 million tons respectively for domestic market in 2013.

According to media reports, Thamrin explained, the volume of domestic requirements set by the government based on the request of domestic companies including PT PLN, Freeport, Newmont and other private companies.