The Indonesian government prohibits coal exports until January 31, 2022

This step is taken to ensure the fulfillment of coal supply for power plants

The Indonesian government through the Ministry of Energy and Mineral Resources has temporarily banned coal exports for the period 1 to 31 January 2022 to ensure the availability of a new supply of coal for domestic power plants.

The export ban policy is aimed at holders of Mining Business Permits (IUP) or IUPKs for the Production Operation stage, IUPK as Continuation of Contract/Agreement Operations and PKP2B.

"This step is taken to ensure the fulfillment of coal supply for power plants," said Director General of Mineral and Coal Ridwan Jamaludin in a statement in Jakarta, Saturday.

Ridwan explained that the reduced supply of coal will affect more than 10 million customers of state electricity company PT PLN (Persero) ranging from the general public to industry.

If the export ban is not implemented, it can cause blackouts of 20 coal-fired power plants with a power of 10,850 megawatts.

 

"This has the potential to disrupt the stability of the national economy. When the supply of coal for power plants is fulfilled, it will return to normal, export can be done. We will evaluate it after January 5, 2022," said Ridwan.

The government has several times reminded coal entrepreneurs to continue to fulfill their commitment to supply coal to PLN.

However, the realization of coal supply every month to PLN is below the mandatory percentage of coal sales for domestic needs (DMO), so that it accumulates and at the end of the year PLN's power plants experience a coal supply deficit.

According to Ridwan, the safe supply of coal at the PLTU PLN is more than 20 days of operation.

Until January 1, 2022, of the 5.1 million metric tons of assignments from the government, only 35 thousand metric tons were fulfilled, or less than 1.0 percent.

"This number cannot meet the needs of each existing PLTU. If strategic steps are not taken immediately, there will be widespread blackouts," said Ridwan.

The government has issued the Decree of the Minister of Energy and Mineral Resources Number 139.K/HK.02/MEM.B/2021 which regulates more specifically the obligation to fulfill coal for domestic needs, namely a minimum of 25 percent of the approved production plan and the selling price of coal for supply. electric power for public use at 70 US dollars per metric ton.

 

Ridwan emphasized to holders of Mining Business Permits (IUP) or Special Mining Permits for the production operation stage to comply with the fulfillment of domestic coal needs.

 

He further said that coal entrepreneurs understand and support the policy of temporarily banning coal exports in order to meet PLN's coal needs to avoid power outages.

 

However, the coal entrepreneur asked PLN to improve the coal procurement mechanism so that it will get better.

 

"At the same time, we also ask that PLN make efforts and steps for efficiency and business activities that support the provision of quality and reliable electricity for all levels of Indonesian society," said Ridwan.

 

In particular, he emphasized that by complying with the obligation to fulfill domestic coal, it will maintain the investment climate and the national economy.

 

"Don't let the company's non-compliance in fulfilling the DMO disrupt the investment climate and the country's economy," he said.