Govt may terminate 70 coal contracts

The government may terminate 70 coal contracts of works (PKP2B) unless the holders soon realize production, Bisnis daily reported on Monday.

 

“There are 70 PKP2B holders (who have yet to come into production). Surely, we would revoke their licenses unless they realize production by the stipulated deadline,” said MS Marpaung, Director of Coal and Mineral Development at the Ministry of Energy and Mineral Resources in Jakarta on Sunday.

 

He noted however the government would consider problems confronting the companies before deciding to terminate their contracts.

 

He said the government wanted them to soon realize their production in order to meet the national demand that is predicted to increase in the future. The need for coal is predicted to increase following the launching of program for building power plants with a total capacity of 10,000 MW in 2009.

 

He noted that the government had thus far had no plans to obligate the country's coal producers to sell a certain amount of their output to the domestic market as there are more than enough coal supplies on the local market.

 

In early June, Indonesia Coal Mining Association (APBI) called on the government to require coal producers to set aside between 30 percent and 40 percent of their production to fulfill domestic needs.

 

The association estimates that the country's coal production would increase to 185 million tons in 2007 from about 170 million tons last year. (*)