The gasoline and diesel markets in Northwest Europe have tightened as France seeks alternative…
US energy manufacturing is set to grow dramatically under the Inflation Reduction Act, but…
French power company EDF expects first operations at its initial EPR2 reactor at the Penly nuclear…
Indonesia needs 127.1 mil mt coal for domestic market in 2022: energy ministry
Asian LNG procurement heating up as winter approaches
Platts Global Coal Alert
Trainings courses at Global Carbon Markets Conference
Despite incentives, US manufacturers still could fall short of renewable, grid demand
Measuring carbon intensity: The first step to emissions reduction and net-zero goals
PLN requires 64.2 million mt coal in 2022
PLN shortfall 16% in 2021 from original plan
Only 68 companies met over 75% DMO in 2021
Indonesia requires 127.1 million mt of thermal coal supply from the producers for the domestic market in 2022 in order to fulfill local energy needs and avert a shortfall seen in December 2021, the energy ministry said in a presentation Feb. 22.
Receive daily email alerts, subscriber notes & personalize your experience.
While the power plants of state-run Perusahaan Listrik Negara, or PLN, need 64.2 million mt during the year, independent power producers, or IPPs, require 62.9 million mt, according to a presentation by Lana Saria, director of coal business fostering, ministry of energy and mineral resource.
In 2021, PLN’s coal supply realization from 116 supply partners stood at 112 million mt, a shortfall of 16% from the original plan.
The fresh requirement comes weeks after the country relaxed the three-week coal export ban imposed Jan. 1 after domestic stocks slipped to critically low levels as producers failed to meet their domestic supply obligation, or DMO. Under the DMO, miners need to supply 25% of their annual production to the local market.
The ban was eased Jan. 20, post which prices jumped substantially amid supply tightness in the spot market as miners were stuck with clearing January order backlogs with laycans getting delayed.
The price of Indonesian 4,200 kcal/kg GAR coal rose from $63.45/mt FOB Dec. 31 to $80.05/mt Feb. 11, before easing to $76.05/mt Feb. 21, S&P Global Platts data showed.
Indonesia has decided to levy penalties on thermal coal miners that failed to meet their DMO in 2021, as well as impose several restrictions on exports, Platts reported Feb. 4 quoting a decree issued by the energy ministry. The decree stated that the mining business permit may be revoked and operations may be temporarily suspended and other specifications of the fine will be decided by the Director General of Mineral and Coal.
Last year, only 24 companies fulfilled their domestic sales contract, while 44 companies met contracts in the rage of 75%-100%, according to the presentation. Around 36 companies were sanctioned for export ban for not meeting their domestic supply contracts by October 2021, the presentation said, adding more producers who do not meet their commitments will be subject to penalty in the form of export ban and fines.
Indonesia produced 608.62 million mt thermal coal in 2021, of which 316.82 million mt was exported and 216.86 million mt was consumed domestically including non-power sectors apart from the DMO realization, according to data from the website of state-owned information provider Minerba.
Miners often choose to postpone supplying to the local market and focus on spot sale due to lucrative export prices, sources said.
The price of Indonesian 4,200 kcal/kg GAR coal touched a record high of $158/mt FOB Oct. 19 before easing, according to Platts data.
To ensure higher DMO compliance, the government also suggested a monthly review of DMO data instead of annually earlier. This has pushed miners to set aside coal for local supply before offering spot cargoes for sale in the overseas market, further tightening the supply crunch amid sellers already dealing with order backlogs.
To continue reading you must login or register with us.
It’s free and easy to do. Please use the button below and we will bring you back here when complete.