Indonesia is reviewing rules that require coal miners to sell a portion of their coal to local buyers. Ministry of Energy and Mineral Resources Coal and Minerals.
“We are thinking of ways to avoid harming the domestic sector, but still takes care of exports,” Director General Bambang Gatot Ariyono said. “The changes are aimed at finding the balance between domestic obligation and exports. The government will also draft new regulations to support its agenda of building a downstream industry for coal.”
However, Indonesian Coal Mining Association Chairman Pandu Sjahrir said, “Domestic coal consumption remains unchanged at 120 million metric tons per year (mtpy) while output is climbing to 600 million mtpy. If the government wants to keep the 25%, output should be capped at 480 million mt.”
Indonesian coal miners are currently required to sell 25% of their output to the local market, mainly state-owned electric company PT Perusahaan Listrik Negara (PLN), a policy known as the domestic market obligation. However, since PLN’s demand is limited while output is climbing, the miners are unable to maintain the ratio of exports to domestic sales.