Regents to determine coal production quota

The Ministry of Energy and Mineral Resources (MEMR) is drafting a new minister regulation on limiting the country?s coal production by assigning output quota to each producer in a bid to among others help secure future domestic needs and stabilize price of the commodity, Kontan reported on Wednesday.

The paper said that the new regulation is expected to be issued this year. According to draft of the new regulation, the country?s coal production growth will be limited to 1 percent per year.

The production limit will be implemented by among others setting up production quota, which will be determined via two mechanisms: production limit based on calorific value and production limit per province.

Provincial governor will distribute production quota to coal-producing regencies. The regents will then determine the production quota of each producer, said Gultom Guska, Head of Coal Business Supervision and Coal Marketing at MEMR. This would eliminate the current work and budget plan proposed by miners to the ministry every year.

The proposed production limit has been criticized by miners who said that it would further undermine their profitability amid the current downturn in the global coal market. They also said that the limit would reduce government revenue from the sector. (*)