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COAL-JAKARTA. The Ministry of Energy and Mineral Resources (ESDM) said that the target for the obligation to supply coal for domestic use or Domestic Market Obligation (DMO) in 2024 is larger than last year.
"The DMO requirement for 2024 is 220 million tons," said Irwandy Arif, Special Staff of the Minister of ESDM for Acceleration of Mineral and Coal Governance, to Kontan.co.id, Sunday (18/2).
According to Kontan.co.id's calculations, compared to the DMO realization in 2023 of 213 million tons, there is an increase in the obligation to supply domestically by 7 million tons or 3.2% year on year (YoY).
The DMO realization in 2023 was recorded to exceed the Ministry of ESDM's forecast, which is 120% of its target of 177 million tons.
Irwandy stated, the largest DMO consumers are steam power plants (PLTU), followed by fertilizer factories, cement factories, to smelters. However, smelters specifically use high-calorie coal.
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Based on the Ministry of ESDM's records, there was an increase in domestic coal utilization last year due to the addition of new Steam Power Plants (PLTU) from the 35 GW projects being completed.
This year, the Ministry of ESDM has set a coal production target of 710 million tons.
Indonesia's coal production has been increasing since 2020, where in that year its production was 564 million tons with a DMO of 132 million tons and exports of 405 million tons.
For 2021, coal production reached 614 million tons, with a DMO of 133 million tons and exports of 435 million tons.
In 2022, Indonesia's coal production increased again to 687 million tons, with a DMO supply of 216 million tons and exports reaching 465 million tons.
The Executive Director of the Indonesian Coal Mining Association (APBI), Hendra Sinadia explained that the DMO supply in 2023 went smoothly and so far his party has not heard of any PLTU experiencing a shortage of supply.
"All coal mining companies are obliged to set aside 25% of their production for domestic supply. The three largest companies supplying DMO are Kaltim Prima Coal (KPC), Adaro Indonesia, and Bukit Asam," he said when contacted separately.
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In general, APBI sees the global thermal coal market condition in the last two years in a state of oversupply.
From the global demand side, the demand for thermal coal in 2022 to 2023 continues to increase, although the percentage is small, in the range of 1%-2%.
On the production side, there has been a drastic increase, including production from exporting countries such as Indonesia and Australia as well as the main coal importing countries in the world, namely China and India.
