Govt may delay coal DMO implementation

The government may delay the plan to require coal of contract work (CCoW) holders to sell between 20 and 30 percent of their production to the local market beginning next month because the absence of a decree to support the policy.

The Ministry of Energy and Mineral Resources has promised to issue a decree for the domestic market obligation (DMO) policy but thus far no decree has been signed.

Gatot Ariyono, the ministry's director for development of mineral and coal mining companies, explained on Tuesday that there was still a difference within the ministry on how to manage the coal to be sold under the DMO program.

?Some want a special agency to be established to manage the DMO program, while others prefer other mechanism,? he said.

Separately, Minsiter of Energy and Mineral Resources Minister Purnomo Yusgiantoro said that he had yet to receive the draft decree.

The ministry earlier estimated that the amount of coal to be sold under the DMO scheme would reach 68 million tons next year, or about 28.8 percent of the total production in that year which is expected to reach 236 million tons (excluding KP holders producers). About 41.18 million tons of the total amounts would be supplied to state-owned electricity company PT Perusahaan Listrik Negara (PLN) while the remainders would be absorbed by other industrial buyers.

Prices of coal to be sold under the DMO scheme would be fixed by the government based on four international price references including Indonesian coal index (ICI), Barlow Jonker, Platts and Global index and Singapore (Platts) index. (godang)