Association recommends scheme on 'domestic market obligation' for coal

Indonesian Coal Mining Association (ICMA) recommends a "fair" implementataion of the so-called Domestic Market Obligation (DMO) that requires coal mining companies set aside some of their output to the local market, Republika reported on Wednesday.

ICMA?s Chairman Jeffrey Mulyono said in Jakarta on Tuesday that a fair implementation of DMO should be based on the ratio of domestic need to total national production every year.

?For example, if the domestic need was 39.5 million tons and production was 153.4 million tons in 2005, the percentage was 25.75% and each company must set aside 25.75% of the production to fulfill domestic need,? he said.

Earlier, ICMA called on the government to require coal producers to set aside between 30 percent and 40 percent of their production to fulfill domestic needs.

Jeffrey Mulyono said that DMO is needed to anticipate a possible shortage of domestic supply due to the rising exports, he said in June 2007. (*)