The Association of Indonesian Coal Companies (APBI) observes several points before the Coal Public Service Agency (BLU) carries out its functions. Meanwhile, the formation of the coal BLU is currently ongoing and is reportedly nearing completion. Executive Director of the Indonesian Coal Companies Association (APBI), Hendra Sinadia said, BLU was basically formed for the sake of the problem of coal supply for electricity. However, suddenly in the middle of the road the government will include other industries such as cement, textiles, and others to also get contributions from the coal BLU.
"This is what APBI asks for a review regarding the inclusion of coal supply to the non-electricity industry, excluding smelters, within the scope of the coal BLU," he explained, Thursday (21/7).
Furthermore, Hendra noted, most of the products that use coal are exported outside of non-electricity, such as cement, paper, textiles, and others.
"In fact, we understand the need for the coal industry to support the electricity industry because all of its production is for domestic purposes," he explained.
Hendra said the implementation of the coal BLU needs to be accelerated because it is considered a permanent solution. However, before the BLU carries out its function, the government must review several things, such as the price scheme and transparency because it involves large funds.
Not only that, the precise arrangement of compensation funds must also be carried out quickly because this issue should not interfere with the cash flow of coal companies.
“It is these technical matters that we ask to be thoroughly studied. We hope that there will be socialization involving business actors, coal producers who are affected by the domestic market obligation (DMO)," he said.
But in fact, APBI still accepts the results of government policies. "We cannot refuse if the policy has been implemented," said Hendra.
On the other hand, Chairman of the Steering Committee and Chairman of the Association of Indonesian Mining Experts (PERHAPI), Rizal Kasli explained that currently the price of coal in the international market has reached a very high price of more than US$ 300 per ton.
Meanwhile, the domestic price for the fulfillment of the DMO is around US$ 70 per ton for ESDM Number 206.K/HK.02/MEM.B/2021 concerning the Selling Price of Coal to Fulfill the Domestic Demand for Raw Materials/Fuels for the Cement and Fertilizer Industry.
“This means that the government with these provisions has also provided coal price subsidies to the domestic industry. The disparity in the selling price of coal between domestic and overseas is quite large," he explained when contacted separately.
However, according to Perhapi, BLU is not right for now and needs an in-depth study first. Rizal said the government should not respond to the problem of a shortage of domestic coal supply by immediately making new instruments that are not necessarily effective in solving the problem.
“For the fulfillment of the DMO, the steps taken by the Director General of Mineral and Coal at the beginning of this year were quite effective in responding to the scarcity of coal in the country. This means that supervision and law enforcement must be carried out properly and firmly," he said.
Rizal further explained that companies that comply with their commitment to DMO must fulfill their obligations. Supervision of such compliance must be carried out weekly or monthly so as not to drag on. He emphasized, do not wait for the end of the new year to do reconciliation.
So, what about companies whose quality or calories do not match domestic specifications? Rizal explained that they were still given the authority to export their coal production to increase the country's foreign exchange.
“However, the application of a Compensation Fund levy can be applied to such coal mining companies. The funds go directly to the State Treasury through the PNBP mechanism. There is no need for a special agency to accommodate these funds,” he said.
electricity and US$ 90 per tonne for the cement and fertilizer industry.
The regulation has been applied in the fulfillment of the DMO with a Ministerial decision.