Indonesia's ban on coal exports is set to expire on Monday, but shipments from the archipelago may still be limited, with authorities allowing only those that fulfill their domestic market obligation (DMO) to resume overseas shipments. A month after the ban was introduced, around 200 miners have been cleared to export, according to local media, as they have either fulfilled their DMO or paid fines. There are around 600 mining companies operating in Indonesia. But even after the ban is lifted, only those that have complied with the DMO rules will be allowed to resume exports. Indonesia hopes to avoid imposing another sudden ban on overseas shipments, as it did Jan. 1. On that occasion, the government said state utility Perusahaan Listrik Negara (PLN) was running critically low on stockpiles, threatening to disrupt power on the islands of Java and Bali, as miners skirted domestic supply requirements. Under the DMO, miners must supply a quarter of their annual production to the local market at a price of no more than $70 per ton, which is below the current global price. Many miners, particularly small and midsize producers, have been flouting the rule, selling overseas to plump up their profit.
The government had allowed some exports during the monthlong ban, as countries that depend on the commodity, including Japan, South Korea and the Philippines, all lobbied for exceptions. In response to low compliance with the domestic supply rules, Jakarta put in place a new regulation that imposes harsher penalties on violators. The new regulation, which came into effect on Jan. 19, says miners will not be allowed to export coal until they meet their DMO. It also requires monthly reporting of DMO fulfillment data; those that fail to meet their target will face a 60-day operating ban and fines. If they fail to pay the fine, they will have their permits revoked. Changes to the DMO mechanism could be on the way as well, with lawmakers discussing the issue earlier in January. One option being considered is a mechanism whereby PLN would buy locally mined coal at the market price, rather than the DMO mandated price, with miners charged levies to make up the difference.