DMO for 2022 is Set at 166 MT, Says Energy Minister

MINISTRY OF ENERGY AND MINERAL RESOURCES

THE REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 75.Pers/04/SJI/2022

Date: 17 February 2022

DMO for 2022 is Set at 166 MT, Says Energy Minister

In 2022, the DMO (domestic market obligation) plan is 166 million metric tons (MT) out of coal production plan of 663 million metric tons, the Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, has said in a work meeting with the Commission VII of the House of Representatives of the Republic of Indonesia (DPR RI) at Nusantara Building of the DPR RI on Thursday (17/2).

Miners who hold Work Agreements on Coal Mining Business (PKP2B), Mining Business Permits (IUP), and Special Mining Business Permits (IUPK) will have to set aside 25% of their production for DMO.

In January 2022, coal production reached 34 million MT, with 13 million MT were used for DMO and 12 million MT exported.

Arifin has projected that domestic coal demands will continue to increase in the next five years. The increase will occur in the power generation and industry sectors. "From 165.75 million MT in 2022, demands will increase to 208.54 million MT in 2025," added Arifin.

Arifin went on to say that coal power plants need 127.1 million MT, with 64.2 million MT are used for state electricity utility PT PLN (Persero) power plants and 62.9 million for Independent Power Producers (IPP). "On average, coal power plants need 10-11 million MT of coal monthly," detailed Arifin.

Miners who do not fulfill the DMO or the approved sales contracts will be subject to sanctions in the forms of export ban and fines or DMO compensation. The guidelines for export ban, fines, DMO compensation, and sanctions are set out in Decision of Minister of EMR Number 13 of 2022.

Securing PLN's Supplies

The government is taking decisive measures to ensure coal supply for PLN in 2022. The Directorate General of Mineral and Coal and PT PLN (Persero) have prepared a real time enforcement system. "This system combines an on-field supervisory system and a digital system with the management information system of the Directorate General of Mineral and Coal," said Arifin.

If loading fails at a certain location, the system will send a notification to the system of the Directorate General of Mineral and Coal and automatically issue a warning letter. Corrective actions can thus be taken quickly, accurately, and measurably.

PLN has also changed their contracts with coal miners, from flexible to long-term fixed contracts, while at the same time implementing Decision of Minister of EMR Number 139 of 2021 on the Fulfillment of Domestic Coal Needs.

Additionally, PLN has also resolved volume, logistics, contracting, supervision and enforcement issues to increase the capacity and speed to unload coal cargoes. "The volume of coal supply to PLN's coal power plants from mining companies is set out in the approved Work Plan and Budget (WP&B) which miners must comply with," said Arifin.

The measures are also a follow-up to the recommendations of the Taskforce to Increase State Revenue from the mineral and coal sub-sector formed by the Commission VII of the DPR RI. (IY)

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