Coal Supply Crisis in the World's Largest Coal Exporter

Coal Mining
Topic

  • Indonesia took a sudden and radical step by banning coal exports amidst the threat of electricity blackouts due to dwindling coal stocks in many Steam-Fired Power Plants (PLTU). Data obtained by D-Insights shows that the Production Operation Day of some PLTUs is less than ten days, some of which are even under five days in early January.
  • The coal supply crisis is unavoidable given the low realization of Domestic Market Obligations (DMO). DMO realization only reached 10 percent of total coal production, less than half of the 25 percent rule. This is the lowest achievement in five years.
  • Putting DMO violation as the only problem is a simplification. Indeed, regulatory loopholes and Electricity State Company (PLN) poor stock management played a big role in causing the coal supply crisis to PLTUs.
  • Indonesia faces many consequences from its coal export ban: a decrease in revenue and supply of foreign currency from coal exports, a takeover of export markets by other large coal producers, and diplomatic tensions with big client countries.

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