Cement Industry Still Faces Coal Supply Scarcity

The cement industry is complaining about coal scarcity. PT Semen Indonesia Tbk (SMGR) President Director Dony Arsal said several producers were reluctant to sell coal under the domestic market obligation (DMO) price of US$90 per ton.

Semen Indonesia requires 7.3 million tons of coal by this year. However, until now, the state holding company has only obtained 5.7 million tons of coal, thus still lacking 1.6 million tons of supply.

Semen Indonesia has held an open auction for coal procurement at a DMO price up to three times to cover this shortfall. However, "No one has submitted a tender," Dony said in a hearing with the House's Industrial Commission Tuesday.

For this reason, Dony said the Ministry of Energy and Mineral Resources (ESDM) had approached mining companies to supply coal to Semen Indonesia. As a result, the state-owned cement producer will get a supply of 950,000 tons of coal. "We are still looking for another 1 million tons of supply until the end of this year. This is what we are waiting for. We can obtain 950,000 tons; then we will look for the rest by approaching several cement suppliers," he said.