Coal miners to be allowed to buy coal to meet DMO

The country?s coal mining companies will be allowed to buy coal from other companies to meet the domestic market obligation (DMO) under the regulation currently being prepared by the government, Kompas reported on Wednesday.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta on Tuesday that in order to meet the growing coal demand in the domestic market, the government will require coal miners to set aside part of their production for the domestic market under the DMO program

Under the draft regulation, the coal miners can fulfill the DMO requirement by setting aside part of their production or by buying from other companies. The prices of the coal to be sold under the DMO requirement will be also determined by the government.

The regulation will also include a penalty or fines for those which fail to meet the DMO regulation.

The regulation is expected to be implemented next year and it will be valid to all PKP2B or KP holders.

The newspaper did not specify how much of their output that miners have to set aside for the domestic market but in January this year, State Minister of State Enterprises Sofyan Djalil proposed 50 percent of the country's production be sold on the domestic market. (*)