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Monday, 12 September 11
INDONESIAN GOVERNMENT HAS ALLOCATED MORE COAL FOR 2012


COALspot.com - Indonesian government has increased the domestic market obligation allocation to 82.07 million tons of coal for 2012, which is 4 percent higher than 2011 allocations. 

The country is planning to produce 332 million tons of coal in 2012, according to the ministerial decree signed on 25 August 2011.

Minister of Energy and Mineral Resources Darwin Saleh has signed Domestic market obligation decree (1991 K/30/MEM/2011) for 2012, on 25 August 2011.

According to the decree, 63 coal mining companies have requested to fulfil domestic market obligation (DMO) for 2012. PT. Kalitim Prima coal, the country's largest coal producer is requested to allocate 12.689 million tons of coal  and PT. Adaro Indonesia to allocate 11.741 million tons for the domestic market.

PT Kideco Jaya Agung will allocate 8.03 million tons, PT Berau Coal (5.52 million tons), PT Indominco Mandiri (3.46 million tons), and PT Tambang Batubara Bukit Asam Tbk (3.21 million tones).

The majority of coal allocations are from CCoW holders (67.048 million tons), 3.213 million tons from state owned coal miner PT. Bukit Asam and remaining from IUP holders.

40 CCoW holders are to allocate 67.048 million ton of coal and 22 IUP OP holders are requested to allocate 11.80 million tons for domestic market.

As usual, state owned electricity company will be the largest coal consumer in 2012, and it may consume 52.20 million tons of coal or 69.70 percent of total DMO allocation for 2012.

The lowest calorific value is expected to supply was 4000 kcal/kg on as received basis. Textile industry has been allocated higher GCV coal such 6500 kcal/kg on arb basis and PT. Antam will consume 190,000 mt of coal with GCV 6600 kcal/kg on arb basis.

Indonesian cement industry is expected to burn 8.40 million tons coal with energy value 4100 - 6300 kcal/kg coal on arb basis.

Under Indonesian new mining law the domestic market obligation is must and the selected producers are requested to allocate coal as per government decree for the domestic market prior to conclude any deals for the export market.

The implementation of coal Domestic Market Obligation (DMO) and the Indonesian Coal Reference price (ICRP) is aimed at securing continued domestic coal supply and optimization of state's revenue. The implementation of DMO and ICRP refers to Presidential Decree No.5/2006 on National Energy Policies which states that by 2025, coal shall contribute to 35% towards the national energy mix. This is also regulated in Law No.3/2007 on Energy and Law No.4/2009 on Mineral and Coal Mining.

To contact the reporter responsible on this story: Efendi at efendi@coalspot.com



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