National bulkers are ready transport coal for domestic distribution as the volume of domestic coal distribution predictably will increase significantly for this month (January), following the government policy to ban coal export until January 31.
“National shipping lines, member of INSA (Indonesia National Shipowners’ Association), are ready to distribute coal for domestic supply. Our national bulkers, both of Handymax dan Panamax, are available,” Carmelita Hartoto, INSA Chairwoman, told Indonesia Shipping Gazette this morning (Monday, January 3, 2022).
But, Carmelita noted that the policy has forced some tug & barge players currently serving transhipment to mother vessels lost jobs. She expects this policy should be socialized intensively before coming into effect, thus giving not much lost to shipping lines, the ones having contracts, in particular.
Carmelita expects the ban for coal export will be effective for one month only and will not extend. She urges coal producers to follow the regulation, especially in coal volume allocation for domestic market obligation (DMO).
As reported earlier, in a bid to ensure domestic stock and supply, Indonesia’s government has temporarily banned coal exports from January 1 to 31, 2022. According to the Ministry of Energy and Mineral Resources, the export ban is aimed at the holders of mining business permits (IUPs) and coal mine company work contracts (PKP2Bs).
Ridwan Jamaludin, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources said in a statement on Saturday (January 1, 2022) that lack of domestic coal supply could affect more than 10 million customers of state-run electric company PT PLN (Persero).
This figure constitutes both the general public and the industry, he elaborated. If the export ban is not enforced, it could cause an outage at 20 coal-fired power stations generating 10.850 megawatts of power, he said.
“This could potentially disturb the stability of the national economy. When the coal supply for the power plants is enough or returns to normal, then we can export,” he said.
“We will evaluate it after January 5, 2022,” he said further.
The government has reminded coal entrepreneurs to fulfil their commitment to supplying coal to PLN, he added. However, in practice, the coal supply for PLN has been below the obligated coal sale percentage for domestic requirement (DMO) each month, he pointed out.
This caused PLN to experience a coal supply deficit at the end of 2021, he informed.
According to Jamaludin, a secure coal supply at PLN’s coal-fired power station is above 20 days of operation.
Until January 1, 2022, of the 5.1 million metric tons targeted by the government, only 35 thousand metric tons were delivered, or less than one percent, he noted.
“This figure could not fulfill the need of every power plant. If we do not make a strategic move, there will be a widespread power outage,” he affirmed.
The government has issued the Energy and Mineral Resources Ministerial Decision No. 139.K/HK.02/MEM.B/2021 that specifically regulates the obligation to fulfill domestic coal demand, which is at least 25 percent of the agreed production plan, he said.
Meanwhile, the price of coal for the provision of electric power for the general public is US$70 per metric ton, he added.
Jamaludin emphasized that complying with the obligation to fulfill domestic coal demand would preserve the investment climate and the national economy.
In addition, he informed that coal entrepreneurs understood and supported the policy of temporarily banning coal exports to support domestic coal demand.
As a coal entrepreneur, he urged PLN to fix the coal supply procurement mechanism in order to improve it.
“At the same time, we also ask PLN to make an effort and take a step to support a quality and reliable electric energy provision for all of Indonesia,” he remarked.