Translated by: MOS Information Team – baoliaofen
A senior minister in Indonesia, the world’s largest power coal exporter, said Monday (Jan. 10) that the country has allowed 14 coal-laden ships to leave the country after obtaining verification from the mining and transportation sectors. The Indonesian government will evaluate whether to lift the ban on Wednesday.
Indonesia suspended exports on Jan. 1 after state-owned power company PLN reported extremely low coal stock levels, causing global coal prices to move higher last week. Japan, South Korea, and the Philippines called for an easing of the ban.
Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said in a statement, “As of today, after seeing a much better supply situation in the PLN, the 14 vessels that are already loaded with coal and have already been paid for by buyers can be released for export immediately. The government will assess on Wednesday whether to lift the ban and, if it decides to do so, will implement it gradually. While the impact of resuming exports on compliance with the so-called Domestic Market Obligation (DMO) rules will be considered.” The government will assess on Wednesday whether to lift the ban and, if it decides to do so, will implement it gradually. While the impact of resuming exports on compliance with the so-called Domestic Market Obligation (DMO) rules will be considered.”
Under DMO regulations, miners must sell 25 percent of their production to the domestic market. The maximum price to sell to domestic power plants is $70 per ton.
Luhut had said the government will come up with a new pricing formula so that PLN will buy coal at market prices. The pricing formula, which may involve the imposition of a coal tax, will be discussed by the authorities within a week and will ensure that PLN’s entire coal demands for the year are met within two weeks of resuming exports to minimize the risk of a future supply crisis for domestic power plants.
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Edited by: Lightyear
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