PLN urges govt to control coal production

State owned electricity company PT Perusahaan Listrik Negara (PLN), the largest domestic buyer of coal, has urged the government to control coal production to ensure that the company will have sufficient coal supply for its power plants in the future, Bisnis Indonesia reported on Wednesday.

Helmi Najamuddin, the head of coal division at the state electricity company, said in Jakarta on Tuesday, said that the coal production control would be needed to prevent the company from importing the commodity in fulfilling the company?s future coal demand.

He feared that the coal reserves would deplete quickly if no control is imposed in production activities, given the fact that Indonesia, whose coal reserves account only about 3 percent of the world?s coal reserves, has now become the largest coal exporter.

This year, PLN needs coal supply of about 66.2 million tons for the company?s coal-fired power plants. The coal demand will continue to increase in the future due to the increase in the number of coal-fired power plants in the country. In 2017, PLN?s coal demand is projected to increase to 100 million tons.

At present, the government imposed a domestic market obligation (DMO) to require coal miners to sell part of its production to the domestic market. The percentage of the production that should be sold in the domestic market is revised every year according to the demand.

Helmi said that the coal producers should not worry about the ability of the local buyers to absorb the coal supply sold under the DMO because PLN?s coal demand would continue to increase in the future.(*)