Government plans coal DMO quota of 74m tons next year

The Ministry of Energy and Mineral Resources is expected to revise downward the coal domestic market obligation (DMO) quota to 74 million tons for 2015 from the initial plan of 103 million tons due to delay in a number of coal-fired power plant projects, Kontan reported on Wednesday.

The paper quoted Retno Damayanti, Director for Coal and Mineral Management Program at the ministry as saying that coal demand from coal-fired power plants operated by PLN, the largest coal consumer in the country, for next year is estimated at only 55 million tons.

She added that the lower DMO quota is also in line with the government intention to increase the revenue from coal royalty and export tax.

The ministry has set coal production target of about 450 million tons next year, up from the estimated 420 million tons for 2014, as the aforementioned revenue is targeted to increase by Rp 10 trillion to Rp 49.64 trillion in 2015.

The ministry and the House of Representatives had earlier set a lower production target of 425 million tons for 2015, of which 103 million tons would be allocated for the domestic market, and the remainder for export. Indonesia is the world?s largest exporter of thermal coal.

Retno said that further details about the 2015 coal DMO policy would be decided next week. (*)