Coal miners asked not to make long-term export contracts

The government has asked coal miners not to make long-term coal export contracts in a bid to provide sufficient supply for the country's coal-fired power plants which would continue to increase in number in the future as part of the government's program to switch to non oil fuel for the power generation, Republika reported on Friday.

Director General of Coal and Geothermal at the Ministry of Energy and Mineral Resources Simon Sembiring said in Jakarta Thursday that coal miners should not make long term coal export contracts to ensure that the operation of new coal-fired power plants within the next two and three years would have enough coal supply.

Besides being asked not to sign a long-term export contracts, coal miners should also allocate at least 30 percent of their production for domestic buyers as stated in their mine contracts.

"The obligation to sell at least 30 percent of production in the local market is clearly stated in the contracts, and all coal miners should abide it," he was quoted as saying.

The government, through state owned electricity company PLN, will build a number of coal-fired power plants with total capacity of about 10,000 MW to meet the surge in the power demand in coming years. In addition, independent power producers will also build a number of coal-fired power plants with capacity of another 10,000 MW within the next few years.

These new power plants which are scheduled to begin commercial operation by 2010 would need coal supply of about 60 million tons a year.

Simon said that the country's coal reserves which reached about 6.98 billion tons would be more than enough to meet the coal needs of the new power plants. Indonesia is currently the world?s top thermal coal exporter.

Meanwhile Jeffrey Muljono, chairman of Indonesian Coal Mining Association assured that domestic power plants would not have troubles in future to secure their coal requirements as Indonesian coal production are growing at the pace of around 15 million tonnes per annum or about 60 million tones until 2010. ?That should be adequate to supply domestic coal requirement,? he said in an interview with Petromindo.Com Friday. He, however, urged that PLN as the monopoly holder in electricity in Indonesia should be transparent in informing the volume of their coal requirements each year. (*)