PLN welcomes government?s anti-illegal coal campaign

State owned electricity company PLN warmly welcomes the government?s program to curb growing activities of illegal coal producers, saying that the move will enable its subsidiary PT Indonesia Power to detect if the coal it buys really comes from licensed coal producers, Neraca daily reported on Monday.

"The government?s anti illegal coal campaign enables us as consumer to buy coal from legal producers," PLN?s operational director Bambang Herminato told reporters over the weekend. He was commenting on press reports that PLN?s subsidiary Indonesia Power had purchased part of its coal needs from illegal producers.

According to Bambang, Indonesia Power buys 80 percent of its coal needs from major coal producers particularly state owned PT Tambang Batubara Bukit Asam under a long-term contract while the other 20 percent from the spot market under short-term contract.

He acknowledges that it is difficult to detect if the coal bought from the spot market originated from illegal producers although the contracts with the sellers had clearly stated that the coal supply should come from licensed producers.

The Ministry of Energy and Mineral Resources announced early last week that the ministry would issue periodically names of licensed coal mining companies that have started production activities. The names of the licensed coal producers will be sent to the country?s coal buyers to ensure that all the coal buyers will procure their coal needs from legal sources.

The data on legal coal producers will be issued on September 15 and will be renewed periodically once every three months. (*)