Coal export permits only granted to producers fulfilling DMO: Minister

Coal export permits only granted to producers fulfilling DMO: Minister

A truck unloads coal at the Kertapati Coal Pier collection area belonging to PT Bukit Asam Tbk in Palembang, South Sumatra, Tuesday (1/4/2022). ANTARA PHOTOS/Nova Wahyudi/wsj.

Jakarta (ANTARA) - Coal export permits were only granted to producers that had fulfilled their domestic market obligation (DMO), according to Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan.

The export permit is granted after there is certainty that the stock of coal for power plants is sufficient.

State electricity company PT PLN (Persero) reports that the current stock of coal in the Steam Power Plant (PLTU) is at least for 15 operating days (HOP), while for remote and critical PLTUs, it is 20 HOP.

Given the sufficient domestic stock based on a report from PLN, the coal, loaded onto 37 vessels as of January 12 and paid for by the buyer, will be released for export," Pandjaitan noted at a coordination meeting on the coal export ban and fulfillment of PLN's coal demand here on Wednesday.

In a written statement here on Thursday, the minister noted that the release of exports should be conducted to avoid the risk of fire when the coal was left for too long.

However, coal companies supplying these vessels will be subject to fines if they have not fulfilled their DMO and contractual obligations to PLN by 2021 in accordance with the Decree of the Minister of Energy and Mineral Resources (ESDM) Number 139 of 2021.

In future, coal companies that intend to export are required to fulfill the conditions set by the government, specifically by fulfilling their DMO obligations in full.

"Coal companies that have fulfilled their sales contracts to PLN and whose DMO obligations reach 100 percent by 2021 will be allowed to start exporting in 2022," he remarked.

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DMO is the obligation of domestic coal producers to supply coal for meeting domestic needs.

DMO's obligation is 25 percent of the total production, with a benchmark price of US$70 per metric ton.

Thereafter, coal companies that already have a contract with PLN, though have not fulfilled their contractual obligations and the DMO for 2021, must fulfill the obligation of fines in accordance with the Decree of the ESDM Minister of Number 139 of 2021.

"The amount of the fine will be applied since the ministerial decree is issued," he added.

Moreover, coal companies whose coal specifications do not match the specifications of PLN's coal requirements or do not have a contract with PLN in 2021 will also be subject to fines with the same mechanism based on the volume of DMO allocation given to each company in accordance with Decree of the ESDM Minister Number 139 of 2021.

Pandjaitan noted that the ministry will verify the fulfillment of the DMO and PLN contracts in 2021 for each coal company as the basis for calculating the fines to be imposed.

At a coordination meeting attended by the Minister of Trade, ESDM Minister, Head of the Financial and Development Supervisory Agency (BPKP), the Maritime Security Agency (Bakamla), and several other government agency officials, Pandjaitan reminded all parties to jointly ensure its implementation.

"I really urge that this is monitored together, so that this can be a momentum for all of us to improve governance in the country and (previous governance problems) do not need to be repeated in future," the minister noted. 

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