GOVT TO SET COAL DMO AT 28.6 PERCENT

Jakarta, Nov 26 (ANTARA) - The government will set the domestic market obligation (DMO) rate at 28.6 percent for coal producers in 2009, Director General for Mineral, Coal and Geothermal Bambang Setiawan said here on Tuesday.

"The DMO rate will be set at 26.8 percent with an estimate of coal production in 2009 at 236 million tons," he said.
He said that the DMO policy would be imposed selectively after the minister for energy and mineral resources issued a decree in the near future.
The director general expressed hope that with the imposition of the DMO, the need for coal at home, particularly for electricity generating plants, would be met.
He said that the DMO price would be set referring to a formulation which was calculated based on a number of coal price indexes. Among the price indexes included the Indonesia Coal Index (ICI), Barlow Jonker, Platts and Global Coal Index.
He said that the price of coal will later be set monthly.
The DMO rate will be imposed as part of the efforts to meet domestic demand because coal prices abroad are relatively high so that coal producers at home tend to export their products.
Whereas demand for coal at home will significantly increase in 2010 when all of the electricity plants, which constitute the country's program to build a 10,000 MW generators, are operational.
In 2010 the DMO are expected to reach 70 million tons.