High price and DMO encourage Indonesian coal miners to boost production

4th june 2018

A number of coal miners are planning to increase production by 10 percent in the second half of this year after a worldwide price increase.

The government has given miners the green light to increase production after they were told to sell 25 percent of their output to state-owned electricity company PLN through the Domestic Market Obligation (DMO) scheme at US$70 per ton.

One of the miners, PT Arutmin Indonesia, plans to produce 28.8 million tons of coal this year, which means that the company has to sell 7.2 million tons to the PLN.

Arutmin CEO Ido Hotma Hutabarat said the company had realized 3.2 million tons of the DMO. He added that the company was looking to increase its production by 10 percent in the fourth quarter of this year.

Meanwhile, PT Kideco Jaya Agung president director Kurnia Ariawan said it too wanted to increase its coal production.

“Increasing production is not a simple task. We are now discussing the mechanism,” he said, adding that this year, the company was looking to produce 32 million tons of coal, eight of which would be sold to the PLN.

“We have to sell about 32 percent of our production or higher than the DMO obligation to the PLN,” Kurnia added.

Source: THE JAKARTA POST