DMO ON COAL Producers IN Indonesia

• I read in the News Paper Kompas dated 11 November, that there is going to be a Domestic Market Obligation (DMO), 20-60 million ton per year, shall be stipulated at the latest of December 2008.
• This amount can be changed in accordance with the real needs movement domestically.
• It is said that such was the statement from the Director Mineral Program Development Coal, and Geothermal Department of Energy and Mineral Power Resources (Direktur Pembinaan Program Mineral, (ESDM), Sukma Saleh Hasibuan, Monday 10/11) in Cirebon.
• The production of Coal is 200 million ton per year.
• The draft of the Ministerial of ESDM relating to this DMO appears to be nearly final.
• The rulings of this DMO among others includes ruling the minimum DMO coal sales ( PMPBDN) for the entire coal producer in Indonesia.
• Whereas, the coal mining companies with qualification of coal types which are not matching for the DMO is subject to certain compensation value in the form of fulfilling transfer quota PMPBDN.
• With Coal DMO, there will be a guarantee of standard price of DMO.
• Such sources says that according to the Coordinator Committee Securing the State Assets Marwan Batubara the rulings of DMO has to be immediately determined because the coal stock for the State Electricity (PT PLN) is decreasing.
• According to him the rulings on the DMO must be adjusted with the State financial strenght and the public interest as the user of the PLN services.
• Meanwhile, the conversion program of coal becoming gas or coal gasification as the mixed fuel source for the Diesel Electricity Power Plant (PLTD) is merely effective to be developed for the territory of Kalimantan and Sumatera.
• Such Kompas newspaper says that the PLN Expertise Functional Service and Production, Sadar Tobing emphasize that the usage of coal gas for the PLTD territory is geared to the PLTD territory which is near to the mining location, namely West Sumatera (Sumatera Barat), South Sumatera, and Kalimantan. This is to save the transportation cost and storage effectiveness.
• The Example Project coal gasification in Paliman, Cirebon, is being developed by PLN to gether with the Mineral and Coal Research and Development Centre together with PT Coal Gas Indonesia.
• Coal Gasification is using the low calorie coal 4.500-5.000 calorie, 6-50 millimeter diameter
• The usage of the coal gas shall substitute 70% of solar usage.
• From the PLN test, the usage of coal gasification as solar mixed for PLTD with 130 Kilowatt Power can safe the solar consumption 63%.

Quoted from the Kompas Newspaper of 11 November 2008 by Agung Supomo Suleiman Partner Business Lawyer

Partner Law Firm Suleiman Agung & Co

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