ICMA proposes 40 percent coal DMO

Indonesian Coal Mining Association (ICMA) is proposing to the government that coal producers set aside up to 40 percent of their production to be supplied to domestic market under the so-called Domestic market Obligation (DMO) scheme, ICMA official said recently as quoted by Bisnis Indonesia.

ICMA executive director Soedjoko Tirtosoekotjo said that the DMO was proposed to ensure supply for the increasing demand of coal by domestic market as government is having state electricity firm PLN to build 15,000 Megawatts of coal-fired power plants in the next five years.

Soedjoko said that ICMA was taking initiative to formulate DMO scheme. ?The scheme should ensure domestic security of supply but must also avoid loss to the producers,? he said without giving specific details.

Indonesia is currently the world?s largest thermal coal exporter, supplying some 120 million tones of coal to the world market in 2005, or 70 percent of Indonesia?s total production. The government, in a bid to lower dependency on the expensive fuel-based power plants for electricity generation, had determined to build some 15,000 MW of new coal-fired power plants across the country within the next 5 years.

Soedjoko also said that ICMA would launch Indonesian Coal Price Index (ICPI) on June. The index, he claimed, will better reflect the dynamic of Indonesian coal prices movement, as it would be consisted of coal with calorific value of between 5,000-7,000 kCal/kg, the majority of coal produced in Indonesia.

He said that the ICPI would be formulated in three grades according to the calorific value. (*)