Jakarta,- The Ministry of Energy and Mineral Resources (ESDM) stated that the target of coal supply obligations for domestic or Domestic Market Obligation (DMO) in 2024 is greater than last year.

"The DMO requirement for 2024 is 220 million tons," Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, Irwandy Arif told Kontan.co.id, Sunday (18/2).

According to Kontan.co.id's calculations, when compared to the realization of the DMO in 2023 of 213 million tons, there was an increase in domestic supply obligations by 7 million tons or 3.2% year on year (YoY).

The realization of DMO in 2023 was recorded to have exceeded the Ministry of Energy and Mineral Resources' prognosis of 120% of its target of 177 million tons.

Irwandy stated that the largest DMO consumers were steam power plants (PLTU), followed by fertilizer factories, cement factories, and smelters. But specifically for smelters using high-calorie coal.

Based on the records of the Ministry of Energy and Mineral Resources, there was an increase in domestic coal utilization last year due to the addition of new Steam Power Plants (PLTU) from the 35 GW projects that are being completed.

Throughout this year, the Ministry of Energy and Mineral Resources has set a coal production target of 710 million tons.

Indonesia's coal production has continued to increase since 2020, in which the production was 564 million tons with DMO of 132 million tons and export of 405 million tons.

For 2021, coal production reached 614 million tons, with a DMO of 133 million tons and exports of 435 million tons.

In 2022, Indonesia's coal production increased again at 687 million tons, with DMO supply of 216 million tons and exports reaching 465 million tons.

Executive Director of the Indonesian Coal Companies Association (APBI), Hendra Sinadia explained that the DMO supply in 2023 is running smoothly and so far he has not heard of any PLTU experiencing supply shortages.

"All coal mining companies are obliged to set aside 25% of their production for domestic supply. The three largest companies that supply DMO are Kaltim Prima Coal (KPC), Adaro Indonesia, and Bukit Asam," he said when contacted separately.

In general, APBI sees the condition of the global thermal coal market in the last two years in a condition where supply far exceeds demand, aka oversupply.

In terms of global demand, the demand for thermal coal in 2022 to 2023 continues to increase despite a small percentage in the range of 1%-2%.

Meanwhile, on the production side, there has been a drastic increase including production from exporting countries such as Indonesia and Australia as well as the world's major coal importing countries, namely China and India.

Sources : industri.kontan.co.id- Feb 18.24