The Indonesian Coal Mining Association (APBI) has called on the government to revise the domestic market obligation (DMO) scheme for coal, which requires a coal mining company to sell 25 percent of its production to the domestic market at a fixed price of US$70 per ton.
APBI chairman Pandu P. Sjahrir suggested that the scheme be revised so that companies would instead be required to pay non-tax state revenue (PNBP) based on the requirement of the current scheme.
“Not all types of coal can be absorbed by the local industry, particularly state-owned electricity company PLN,” he said as reported by kontan.co.id.
Pandu said the requirement to sell 25 percent of production would negatively affect coal production as coal miners tended to lower production because of the requirement.
He added that the situation had been worsened by the declining coal price in the global market. Therefore, he estimated that the next year’s coal production would further decline if the current DMO scheme was still in place.
The Energy and Mineral Resources Ministry aims for coal production of 506.9 million tons. Production from January to October reached 409.9 million tons. Coal mining companies have put aside 90.71 million tons of coal for DMO from the total annual target of 121 million tons.
However, the ministry’s mineral and coal director general, Bambang Gatot Ariyono, stressed that the current scheme would be maintained next year. (bbn)