Coal sales under DMO to be reviewed every month

The volume of coal to be sold under domestic market obligation will be reviewed in the middle of this year to ensure that local buyers especially state electricity company PLN will be able to absorb all the coal supply, Kontan reported Friday.

Director General of Mineral and Coal at the Energy and Mineral Resources Ministry, Thamrin Sihite, said in Jakarta on Thursday that the review would be needed because last year, the coal sold under DMO could not be all absorbed by the domestic buyers.

DMO is the requirement imposed on coal miners to sell a part of their production in the domestic market. The volume of coal to be sold under DMO is determined by the government.

Last year, the ministry required miners to sell 78.97 million tons or of 24.17 percent of the national production in the domestic market. But the realized absorption was only 66.3 million tons because the operation of a number of new coal-fired power plants was delayed.

In order to ensure that all the coal sold under DMO are all absorbed, the ministry would review the DMO every month and then evaluate it every six month, Thamrin said.

The minister has fixed the volume of coal to be sold under DMO this year at 82.07 million tons or about 24.72 percent of the national production which is expected to reach 332 million tons. The number is based on estimated demands from PLN and other buyers. (*)