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Indonesia: Coal price for electricity stays at $70 per tonne

Christian Fernsby |
Indonesia set out that meeting domestic demand for coal is a priority.

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Topics: INDONESIA    COAL   

To implement these directives, the government through GR Number 96 of 2021 requires holders of Mining Business License (IUP) or Special IUP for Operation-Production to prioritize domestic demands for mineral and/or coal.

We want to guarantee that the public can afford electricity tariff while taking into account the economics of coal business
"The government prioritizes the domestic demand for coal to generate electricity for the public. Therefore, to ensure coal supply for electricity generation, the government has determined the minimum percentage of domestic market obligation (DMO) and the sales price of coal for electricity," Director of Coal Business Fostering of the Ministry of Energy and Mineral Resources (EMR), Sujatmiko, said on Friday (31/12).

Sujatmiko added that the government had issued Decision of Minister of EMR Number 139.K/HK.02/MEM.B/2021 as the legal basis of the coal DMO. The DMO is set at 25% minimum of the approved production plan, and the sales price at US$70 per metric ton.

"Based on Decision of Minister of EMR Number 139.K/HK.02/MEM.B/2021, the domestic sales price of coal to generate electricity for the public is set at the HBA of US$70 per tonne. We want to guarantee that the public can afford electricity tariff while taking into account the economics of coal business," Sujatmiko emphasized.

Mining companies and traders that do not fulfill the contracts for domestic coal are subject to an export ban. However, mining companies and traders that do not have sales contracts with domestic industries that use coal are exempt from the obligation. The export ban can be lifted after mining companies and traders fulfill the coal sales contracts. Besides export ban, fines are also imposed on coal companies that do not honor such contracts.

According to the strategic plan of the Ministry of EMR, the domestic coal demand in 2021 is 137.5 million tonnes, consisting of 113 million tonnes for electricity generation and 24.5 million tonnes for non-electricity generation purposes.


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