Aspebindo Expresss The Reason Entrepreneurs Hold Coal Suplai To PLN

JAKARTA - Deputy Secretary General of the Indonesian Association of Energy and Coal Farmers (Aspebindo) Bhirawa Wicaksana revealed the reason why entrepreneurs are reluctant to supply coal to State Electricity Company (PLN).

Previously, the Minister of Energy and Mineral Resources (ESDM) revealed that 52 companies had carried out domestic market obligation (DMO) of 25 percent of the total production for the electricity sector, until July 2022.

However, there are still 71 coal companies that have not fulfilled these obligations.

Bhirawa said that one of the reasons 71 companies have not fulfilled their DMO obligations is because there are still high price disparities in the domestic market.

The government set a price of 70 US dollars per tonne for the electricity industry and 90 US dollars for the cement and fertilizer industry.

"Meanwhile, smelters according to market prices and coal needs have soared. The price of coal is in the range of 412 dollars and 70 dollars for PLN," he said during a discussion in Jakarta on Wednesday, August 23.

Not only that, there is also an imbalance in the amount of debt imposed on miners as regulated in the Minister of Energy and Mineral Resources number 13 of 2022 which states that entrepreneurs will be subject to a penalty of US$400 minus the price of coal with an HBA benchmark of 70 US dollars.

For coal calories 4,600, the fine is 188 US dollars per ton.

Meanwhile, miners who do not have a contract with PLN even though the coal specifications are needed by PLN, are only subject to a penalty in the form of compensation.

For coal calories 4,600, the compensation is only 18 US dollars per ton.

"The problem has always been the same. Unload the scheme and it hasn't been completed in the past," he continued.

He said, there are challenges that entrepreneurs also face in supplying coal needs to meet national needs.

First, the cargo quota of mine owners is very limited due to more export markets.

Second, prices from mining tend to follow export prices, while prices for PLN and non-smelter industries are mapped

"The price of the export market is more attractive compared to the price of the domestic market, so many choose to export and pay the penalty," he added.

Finally, there is a limited supply of barges for the domestic market due to being widely used for trans-shipment and exports.

For information, the Ministry of Energy and Mineral Resources has issued 123 assignment letters to coal-producing companies to fulfill their DMO obligations and must supply 18.89 million tons of coal to PLN.

" 123 assignment letters have been issued to mining business entities with a total assignment volume of 18.89 million tons with the realization until July 8.03 million tons from 52 companies," he said in a Working Meeting with Commission VII DPR on Tuesday 9 August.

Arifin also detailed several reasons why the company did not or had not carried out its obligations, among others, there were five companies that were constrained by extreme weather, 12 companies that supplied coal were not as needed, two companies whose mines had not yet been operating due to land problems, four companies had difficulty obtaining a mode of coal transportation and there were 48 companies that had not reported.

"The Ministry of Energy and Mineral Resources continues to monitor the commitment of business entities that have not carried out assignments by giving sanctions to business entities that do not carry out assignments without any clear information. So the export feature in the Mineral Monitoring System (MOMS) application will be blocked," continued Arifin.