The Ministry of Energy and Mineral Resources sees the domestic coal demand could fall around 5 percent if the COVID-19 impact hit the global prices prolonged - Photo by APBI Secretariat

JAKARTA (TheInsiderStories) – The Ministry of Energy and Mineral Resources (MEMR) sees the domestic coal demand could fall around 5 percent if the COVID-19 impact hit the global prices prolonged. This year, the government has targeted 155 million tons (MT) of coal sales for domestic market obligation (DMO) ini this year.

“If the COVID-19 pandemic continues, domestic coal demand is expected to fall by around 5 percent,” said the ministry in  a written statement released today (04/13).

But, the government is optimistic that all domestic needs will be met from national production, despite a decline in demand as a result of slowing industrial operations due to the global pandemic. Based on the ministry data, the realization of DMO reached 31.53 MT of coal or 20 percent of the 2020′ targets.

It said, total national production in the first quarter amounting to 143 million tons. The DMO realization for stated-owned power producer, PT Perusahaan Listrik Negara recorded 25.6 MT of coal. The domestic coal needs for the general non-electricity sector reached 5.93 MT.

This year, the government has set a coal selling price for electricity of US$70 per ton in 2020 and the selling price for other industries refers to the Reference Coal Price set by the government every month. The ministry stated, “April price is set at $65.77 per ton or down by $1.31 per ton from the previous month of $67.08 per ton.”

Even so, the government continues to ensure that coal demand for various domestic industries can be met from domestic production, even in the midst of a pandemic. This is because coal production is still in accordance with the established plan so that supply is maintained.

Earlier, director general at the ministry, Bambang Gatot Ariyono, has said the government will delays the submission of Work Plan and Budget for coal producers to be submitted after the first quarter of this year. This plan is regulated in Regulation of the MEMR Number 7 of 2020 concerning the procedures for granting territories, permits and reporting on mining and mineral mining business activities.

The government also considering to changes the coal production quota in 2020 to improve the price of coal in the first semester. Initially, the government targeting the quota target of 530 MT of coal, but now the production has exceeded the figure around 550 MT of coal.

Currently, the ministry raised the quota and give the spaces of another 60 MT of coal tons or 12 percent to match the realization of 2019 production of 610 MT of coal.

EMR ministry has urged the coal producer to prioritize the fulfillment of domestic primary energy needs to support the government’ renewable program. Until October of 2019,  the realization of domestic coal utilization was only 95 MT from the target 128 MT.

The minister, Arifin Tasrif, also decided to continue the DMO of at least 25 percent of the coal production in 2020. These provisions are contained in Ministerial Decree Number 261 of 2019 concerning Fulfillment of Domestic Coal Needs for 2020.

Written by Staff Editor, Email: theinsiderstories@gmail.comPLN