Jakarta (Indonesia Window) – The Indonesian government has set up a coal demand plan for Steam Power Plants this year, reaching 127.1 million metric tons.

Minister of Energy and Mineral Resources Arifin Tasrif said the coal-powered plants of state-owned electricity company PLN require 64.2 million metric tons and those belong to private companies require 62.9 million metric tons.

"The average need reaches 10-11 million metric tons per month," the minister said at a meeting with the House of Representatives here on Thursday (Feb. 17).

The government implements Domestic Market Obligation (DMO) to ensure the availability of coal for power plants.

Arifin emphasized that the DMO is imposed on all coal mining companies operating in Indonesia with 25 percent of production.

Companies that fail to comply with the DMO or sales contracts are subject to export ban sanctions and must pay fines.

"The special price for DMO coal has been set for power generation, referring to Indonesia’s benchmark coal price of 70 U.S. dollars per metric ton," Arifin noted.

In 2022, the government targets the total coal production to reach 663 million tons with a DMO of 166 million tons.

The realization of coal production in January 2022 was recorded at 34 million tons with a total DMO of 13 million tons.

The allocation of domestic coal needs will continue to increase from 166 million tons in 2022 to 208 million tons in 2025.

The growing demand for coal is to meet the fuel needs for power plants and industries of mineral processing and refinery, fertilizer, cement, textile, paper, chemical, and coal downstreaming.

Reporting by Indonesia Window