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BUSINESS

Indonesia defends temporary ban on coal exports

06/01/2022 07:17 PM

JAKARTA, Jan 6 -- The Executive Office of the President of Indonesia has defended President Joko Widodo’s temporary decision to ban coal exports amid protests by local miners and importing countries such as Japan.

Presidential Deputy Chief of Staff Febry Calvin Tetelepta said the president’s decision took into account Indonesia’s national interest as well as the challenges of the global energy crisis.

“The government appreciates companies that fulfilled their coal DMO (domestic market obligation) commitments. However, the president’s directive is within the framework of DMO,” he said in a statement.

He added that the global energy crisis has pushed the whole world to compete for reliable energy sources, including coal from Indonesia, and argued that the President’s order was justified as the country must provide electricity for 270 million people.

The domestic market mechanism on coal production states that 25 per cent of coal production must be sold to government utility company PT Perusahaan Listrik Negara (PT PLN).

The month-long coal export ban for January was imposed earlier this week after coal stocks fell to a low level in several power-generating plants run by PT PLN.

The ban has caused uncertainty in the market and disrupted supply chains to importing countries such as China and India as well, whose contracts are also subject to restrictions.

Yesterday, the Japanese ambassador to Indonesia requested for the ban to be revoked as the commodity is urgently needed in winter and that Japan needs Indonesian coal to run its factories and power plants.

Meanwhile, Jokowi today announced that 2,078 coal and mineral mining permits have been withdrawn as the companies involved failed to submit a work implementation plan.

The country’s energy ministry has also been directed to prioritise coal supply for domestic use.

-- BERNAMA

 


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