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COAL - JAKARTA. Indonesia aims to establish a coal fund agency and start collecting a coal levy in the first quarter next year, to help ensure supply security for domestic power plants and industries, energy minister Arifin Tasrif said on Friday.
The plan to set up the agency follows a coal supply crunch at local power plants that forced the world's largest thermal coal exporter to temporarily halt exports at the start of the year.
"We hope at least in the first quarter it can start operating," the minister told reporters.
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The government plans to collect the levy from coal companies based on their output and proceeds will be used to pay the gap between the coal market price and the price cap set for a domestic market obligation (DMO).
Indonesia has put a price cap of $70 per tonne for coal sales to power plants and a $90 per tonne cap for local cement and fertiliser companies, and other industries.
Officials have said the significant gap between international prices and the domestic price cap had led to poor compliance with the DMO scheme.
Arifin declined to disclose the levy rate, but said it would be tiered based on the coal's calorific value.
"If the calorific value is low, automatically (the levy rate) will be low, as the sale price is low, .. while for the higher calorific value... we will set it higher, because the selling price is higher," Arifin said.
