DOMESTIC MARKET OBLIGATION FOR COAL SET AT 40-45 MILLION TONS

Jakarta, Nov 4 (ANTARA) - The Indonesian government has set the domestic market obligation (DMO) for coal in 2009 at between 40 and 50 million tons, a mineral resources official said.
The director general of minerals, coal and geothermal energy sources, Bambang Setiawan, said here on Tuesday the figure would be put in a ministerial regulation to be issued soon.
"The regulation is just waiting to be signed by the minister," he said.
With the DMO it was expected domestic demand for coal will be met, he said.
Until now, domestic coal consumers were worried that their demand would not be met because producers preferred to export the commodity rather than market it in the country.
The amount of 40 to 50 million tons is what consumers have asked including state electricity company PT PLN that has submitted a request for 36 million tons.
Bambang said big coal producers' output in 2009 would reach 230 to 250 million tons "so the amount of the DMO is still below a quarter of national production."
He said the amount of the DMO would change every year depending on the domestic market's demand.
"Demand for coal will increase significantly in 2010 when many units of the 10,000-MW power project will be operating," he said.
About the regulation for the benchmark price of coal he said that it would be issued along with the DMO regulation.
The benchmark price is set based upon the combination of the Indonesia Coal Index, Barlow Jonker, Global Coal Index and Platts. "The benchmark price will be in effect every month," he said.
He said after the regulation was issued coal contracts would be made in reference to the benchmark price.