There has been DMO mechanism necessitating mining companies to meet state electricity firm PLN's needs. This is absolute and must not be violated for whatever reason.
Jakarta (ANTARA) - President Joko Widodo (Jokowi) has reminded mining companies of their obligation to meet the percentage of coal sales for domestic needs (domestic market obligation/DMO).

"There has been DMO mechanism necessitating mining companies to meet state electricity firm PLN's needs. This is absolute and must not be violated for whatever reason," the President said in an online press statement released from Merdeka Palace in Jakarta on Monday.

Mining companies found violating the DMO mechanism would be liable to sanctions, including refusal of applications for export permits and revocation of business permits, he warned.

The President further ordered the Energy and Mineral Resources Ministry, the State-Owned Enterprises Ministry, and state-owned electricity company PLN to find the best solution in the people's interests.

"The priority is to meet the domestic needs of PLN and domestic industries," he said.

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All companies—private companies, state-owned companies, and their subsidiaries—engaged in mining, plantation, and natural resources processing businesses must accord priority to domestic needs over exports, he reiterated.

"This is the mandate of Article 33 paragraph 3 of the 1945 Constitution that the state controls land, water, and natural wealth in the country for the benefit of the people's prosperity," he said.

The Energy and Mineral Resources Ministry has temporarily banned coal exports from January 1 to January 31, 2022, to ensure coal supplies for domestic power plants.

Director general of minerals and coal at the Energy and Mineral Resources Ministry, Ridwan Djamaluddin, said if coal supplies to domestic power plants are delayed, more than 10 million PLN subscribers, households and industries, will be affected.

If coal export is not banned, 20 thermal power plants with a capacity of 10,850 megawatts will impose a blackout, he said.

"This will potentially disrupt national economic stability. When coal supplies to power plants are met, coal can be exported again. We will evaluate the policy after January 5, 2022," he informed.

Related news: Coal export ban to ensure reliability of power supply: PLN










Translator: Indra Arief Pribadi, Suharto
Editor: Rahmad Nasution
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