As of 1 January 2020, DMO is Set at 25% and Sales Price to Power Plant USD 70 per Ton

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 019.Pers/04/SJI/2020

Date: 7 January 2020

As of 1 January 2020, DMO is Set at 25% and Sales Price to Power Plant USD 70 per Ton

The government through Ministry of EMR has decided to continue coal Domestic Market Obligation (DMO) to holders of Coal Operation-Production Mining Business Licence (IUP), Coal Operation-Production Special Mining Business Licence, and Coal Contract of Work at Operation-Production Phase at least 25% of the production plan volume in 2020.

"The government is committed to continue the policy on the basis of domestic needs and business continuity," said Head of Bureau of Communication, Public Information Services, and Cooperation of Ministry of EMR Agung Pribadi in Jakarta, Tuesday (7/1).

Agung further states the government has prepared a heavy sanction for any licence holders violating the obligation. "In the previous regulation, the sanction is a reduced production quota for the following year; this time, it is the obligation to compensate for sales shortage," he said.

Next, the 25% DMO is applied at the same time with coal pricing for public electricity procurement, at USD 70 per metric ton in 2020. "The same with last year," said Agung.

The price, Agung explains, is set Free on Board the vessel and serves as the ceiling price if the Coal Reference Price (HBA) exceeds USD 70.

The government has set the reference specification for coal sales according to calorific contents of 6,322 kcal/kg GAR, 8% total moisture, 0.8% total sulphur, and 15% ash.

Meanwhile, business entities who are public electricity providers must carry out the contracts agreed with IUP holders and make plans to fulfil coal demands for the following year by giving priority to long-term contract mechanism.

These rules start to apply on 1 January 2020, and are set out in EMR Ministerial Decision Number 261 K/30/MEM/2019 on Fulfillment of Domestic Coal Demands of 2020. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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