Indonesian government through Energy and Mineral Resources (EMR) ministry set its August thermal coal reference price at US$72.67 per metric ton - Photo: Special

JAKARTA (TheInsiderStories) – A total of 32 coal miners proposed additional production with total amount of 21.9 million tons (MT) of coal by the end of this year for export purpose, said one government official yesterday.

“There are 32 companies that have obtained permits for additional production from the ministry. The company could sell all the additional production for export,” the Ministry of Energy and Mineral Resources (MEMR) spokesman, Agung Pribadi stated at the MEMR ministry office.,

He said, the additional production had been approved by the minister Ignasius Jonan. Furhtermore, he added, the MEMR represented by the Directorate General of Mineral and Coal, also has completed an evaluation of all production improvement applications submitted by the companies.

In August 21, Indonesian government has officially raised the production quota for 2018 by 100 MT of coal to 585 MT of coal from the initial planned was 485 MT of coal. As we know, Indonesia’s President Joko Widodo has canceled a plan to revoke domestic market obligation (DMO) policy for coals on July 31, 2018. DMO is a mandate of Law No.4 of 2009 on Minerals and Coal.

According to Jonan, at the limited meeting on August 14 in Bogor Palace, President Widodo provide a number of directives. One of them is by opening up opportunities for additional coal production of 100 million tons.

The ministry was then issued Decree No. 1924K/30/MEM/2018 on Amendments to the Determination of Minimum Percentage of Coal Sales in the Interest during 2018. Higher production of coal is expected to bring more foreign exchange revenue from exports, thus helping to stabilize the already volatile Rupiah.

Last year, Indonesian miners produced 461MT of coal, lower than the 477 MT of coal projected in the ministry’s initial estimation. At that year, the DMO consumption only reached 97MT of coal from a projection of 121MT of coal.

The weak domestic consumption of coal due to the failure of steam power plants to meet their operational targets last year. Its reported currently around 2,500 mining permit holders who have just completed feasibility studies or construction of their facilities and are ready to start production.

The country plans to generate 33 percent of its total energy supply from coal by 2025, up from 30 per cent today. Under the government’s national medium term plan, coal production is expected to reach 400MT of coal in 2019, 60 per cent of which will be consumed domestically.

Email: linda.silaen@theinsiderstories.com