Listening To Coordinating Minister Luhut's Directions Regarding Medium-Term Solutions For Domestic Coal Supply

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. (Photo: Doc. Kemenko Marves)

JAKARTA - Coordinating Minister for Maritime Affairs and Investment (Menko Marves), Luhut Binsar Pandjaitan in a coordination meeting asked to immediately prepare a medium-term solution for the completion of domestic coal supply (Domestic Market Obligation / DMO) for power plants owned by PT PLN (Persero) .

In the meeting with the Cross-Ministerial/Institutional Team (K/L) consisting of the Coordinating Ministry for Maritime Affairs, the Ministry of Trade, the Ministry of Energy and Mineral Resources, and PLN, Luhut said, for short-term solutions to meet the needs of PLN's PLTU HOP and IPP in January, the government has issued various policies and interventions to meet supply allocations and transportation availability to achieve a minimum HOP of 15 days and a minimum HOP of 20 days for critical steam power plants.

Coordinating Minister Luhut gave several directions, including requesting a coal supply contract to PLN to use the CIF (Cost, Insurance, Freight) term.

"So the logistics and delivery arrangements are the responsibility of the coal supplier. So that PLN can focus on its core business to provide reliable electricity," Luhut explained in his statement to the media, quoted on Tuesday, January 11.

Second, Luhut also asked PLN to buy coal from coal mining companies that have good credibility and commitment to compliance. Don't buy from traders who don't own mines anymore.

"PLN must also use long-term contracts to ensure supply and must increase the ability to unload coal at each PLTU," he said.

As of today, Luhut continued, seeing the condition of PLN's supply which is much better, for 14 ships that already have a full load of coal, and have been paid for by the buyer, so that they can be immediately released for export. This number of ships must be verified by the Directorate General of Mineral and Coal and the Directorate General of Sea Transportation (Hubla).

"Bakamla also needs to carry out supervision so that no ships come out outside the list that has been verified by the Directorate General of Mineral and Coal and Hubla," he added.

Not only that, for barges that load coal for export, it is still directed to meet the needs of PLTUs that still need supplies. So it is not allowed to export.

"The government will re-evaluate the opening of exports on Wednesday (12 January 2022). There are several things that need to be studied by a cross-ministerial team to decide before exports are opened," said Luhut.

This is how this export mechanism will be opened regarding the fulfillment of the DMO. In addition, how about exports for coal companies that do not have a contract with PLN or whose coal specifications are not needed by PLN.

So on Wednesday, if the export opening is decided, it will still be done gradually," he explained.

Furthermore, 14 days after the export was opened, all coal contracts for PLN (including IPP) in 2022 have been confirmed along with the monthly allocation for each coal supplier and the allocation to the PLTU. The fulfillment of this DMO must be evaluated every month by the Ministry of Energy and Mineral Resources.

Regarding the medium-term solution, Coordinating Minister Luhut asked for a cross-ministerial team to prepare a BLU solution for coal levies. Coordinating Minister Luhut asked that it be explained within 7 days.