Coal DMO Will Increase to 30 Percent

coal mine

To maintain domestic coal stocks, the Government has designed the sales obligation for domestic market obligation or the DMO of coal to increase from 25 percent to 30 percent.

This obligation is stated in article 6 paragraph 6 of the draft New and Renewable Energy (EBT) Law. The article states that to ensure the availability of primary energy to be used as a power plant (PLTU), the supply of coal for power plants is carried out using a coal sales mechanism for domestic needs or DMO with a minimum requirement of 30 percent of the planned coal production.

In addition, the highest price was set at US$70 per tonne concerning coal with a calorific value of 6,322 kcl per kg. Meanwhile, the price of coal for industries other than smelters is set at US$ 90 per ton.

General Chairperson of ASPEBINDO (Indonesian Coal and Energy Suppliers Association) Anggawira responded casually to the latest policy.

Anggawira said, “The price [of coal] for the energy of US$70 per tonne has long been set, so there is no need for further adjustments. As for the 30 percent DMO, I don’t think there is a problem, because it has been calculated in the RKAB [Work Plan and Cost Budget] prepared by IUP [Mining Business Permit] holders,”

For this year, the Ministry of Energy and Mineral Resources is targeting a coal production plan of 663 million tons. From the production plant, the government set a coal DMO plan of 166 million tons and 130 million tons which will be supplied for power plants.

Furthermore, Anggawira admitted that he could not predict whether there would be an increase or even a decrease in coal prices.

“We can’t confirm whether the price of [coal] will go up/down. However, the price will remain high when compared to the Covid-19 pandemic,” concluded Anggawira.

For information, at the end of last week’s trading, coal prices closed up 0.26 percent at US$ 252.00/ton. However, overall, in a week the price of coal fell 4.6 percent point to point. In a month, coal prices still rose slightly 0.2 percent and rose 174.2 percent over the year.