Why Do Coal Company Owners Want the DMO Revision?

Coal company owners asked the Energy and Mineral Resources Ministry to revise several provisions on this year’s domestic coal obligation amid the COVID-19 pandemic. The Executive Director of the Indonesian Coal Mining Association (APBI), Hendra Sinadia, revealed that many coal-exporting countries were currently in lockdowns. As a result, coal companies had to focus their sales on the domestic market.

“However, PLN and several independent power producers (IPP) have indeed lowered their coal demands,” Hendra stated on Tuesday (6/2). The declines negatively impacted the coal business, making it difficult for companies to meet the domestic market obligation (DMO). Therefore, APBI had requested the Energy and Mineral Resources Ministry to temporarily suspend sanctions for companies failing to meet the 2020 DMO since they would only put more strain on the finances.

Besides, APBI also asked the ministry to lower the 2020 DMO percentage, currently at 25 percent, to 18 percent of the coal production plan. The government is still using the Energy and Mineral Resources Ministerial Decree No. 261K/30/MEM/2019 on the domestic coal demand fulfillment in 2020. They also asked for sanction or compensation reduction by 50 percent of the current tariff and postponement of payment to the next year.