The policy has been implemented to allow the company to consistently secure electric supply for the nation, PLN's Corporate Communication and CSR Executive Vice President Agung Murdifi said in a statement released on Monday.
Direct cooperation with miners is beneficial in terms of supply production and volume assurance, he noted.
Adhering to the government's suggestion, coal purchase contracts are being made long term, based on a price that is evaluated each year, he informed.
"To ensure security of supply, a long term contract with mine owners that have the specification that PLN needs and a large amount of reserves is the best option," Murdifi explained.
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The rising price of coal has compelled PLN to take other initiatives to secure the supply of coal, such as preparing digitalization, an early warning system, integrated system, and intensive inter-companies collaboration with the Ministry of Energy and Mineral Resources, he said.
In addition, PLN has secured alternative supply through the purchase of coal in the spot market, and by optimizing supply distribution and reinforcing logistics management, including shipping schedules, he added.
For the last six months, the availability of coal has been scarce due to various factors such as weather, high price disparity in the international market, and the impact of the COVID-19 pandemic, Murdifi said.
In August 16, 2021, coal reached its highest price at US$163.40 per ton, which was its highest level, while the average price this year was just US$101.83 per ton.
The Ministry of Energy and Mineral Resources has determined that Indonesia's reference coal price is around US$130.99 per ton in August 2021, which has been the highest on record in Indonesian within the last decade.
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Translator: Sugiharto P, Fadhli Ruhman
Editor: Rahmad Nasution
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