Indonesia will revoke export permits of coal miners who refuse to supply domestic power group PLN, CNBC Indonesia reported, citing Arifin Tasrif, minister of Energy and Mineral Resources (ESDM).
This remark responds to the concern of PLN, the country's largest coal-fired power producer, that coal supply has become unsustainable as producers refused to renew their contracts after expiration.
Arifin Tasrif stressed the fulfillment of coal needs for domestic purpose is an obligation and it cannot be postponed for any reason.
Coal miners, however, tried to withhold supply to PLN unless the Public Service Agency (BLU) is set up. This is because under the BLU scheme, PLN will pay the price of $70/t as capped by the Domestic Market Obligation rule and the remaining difference from the market price will be paid by the BLU.
At present, PLN can maintain supply through a so-called "emergency exit", namely assistance from the Director General of Mineral and Coal, but it is only temporary, the report said.
Indonesia banned coal exports for all coal miners in January as almost all miners failed to fully complete their DMOs, resulting in a power supply crisis. Due to a disparity between export and domestic prices, miners were less willing to sell domestically.
(Writing by Alex Guo Editing by Tammy Yang)
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