Indonesia plans to put coal exports on hold from 48 miners who had failed to complete their Domestic Market Obligations (DMOs) without explaining reasons, CNBC Indonesia reported on August 9, citing a senior official.
Only 52 companies out of 123 companies obliged to supply coal to the country's largest power group PLN had completed their assessment, Arifin Tasrif, Minister of Energy and Mineral Resources (ESDM), noted at a meeting in the House of Representatives, according to the report.
As of July, the 52 companies only delivered 8 million tonnes of coal, less than 50% of a total required 18.89 million tonnes, the minister said.
Among those that failed to complete their obligations, five reported the rainy weather affected production, 12 said their product specifications were not in line with PLN's requirements, two hadn't well solved the land problems and four had difficulty in transportation.
There were 48 companies giving no reasons for their failure, and would face a penalty of banning them from getting access to the export feature on the MoMS online platform, Tasrif was quoted as said.
The export ban came as coal producers preferred to pay fines for their DMO failures to proceed with coal exports rather than sell coal to PLN, as the export prices brought them higher profits than selling domestically with the addition of the fines, industry sources said.
Under the DMO rule, coal prices sold to PLN are capped at $70/t, basis 6,322 Kcal/kg GAR.
Early this month, PLN's Executive Vice President Sapto Aji Nugroho expressed concerns that its coal stockpiles would be unsustainable if the supply issue couldn't be solved.
The PLN's official hoped the Public Service Agency (BLU) to start operation as soon as possible. In this BLU scheme, PLN will still pay the price of $70/t, while the remaining difference from the market prices will be paid directly by the BLU to the miners.
The BLU's establishment, however, is still in the pipeline because of a debate over the legislation.
(Writing by Alex Guo Editing by Tammy Yang)
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