JAKARTA, Jan. 21 (Xinhua) -- To prevent illegal coal trading due to the introduction of the proposed domestic market obligation (DMO) policy, producers in Indonesia urged the government to introduce a market-based pricing system, local press reported Monday.
The Indonesian Mining Society (IMS) said setting up a market-based pricing system domestically would address the huge disparity between local and international coal prices.
The domestic coal price currently averages around 20 U.S. dollars per ton under existing contracts between producers, industries and the government, while the international price hit the 90 dollars mark last week.
The government has been weighing up whether to implement the DMO policy on coal, under which producers would be obliged to allocate a certain percentage of the coal they produce for local consumption, reported English-language daily The Jakarta Post.
This year, Indonesia expects to produce up to 234 million tons of coal, against 203 million tons in 2007. Last year's export sales were recorded at about 170 million tons.
The domestic demand for coal is expected to rise significantly during the next two years as state-owned power company PLN starts to operate several new power plants. PLN's demand for coal is expected to soar to 70 million tons annually as of the end of 2009,from a current 30 million tons per year.
The demand for coal in the industrial sector is also expected to increase, with many companies switching to coal as an energy source due to the increasing price of oil and gas.
The Indonesian Mining Society (IMS) said setting up a market-based pricing system domestically would address the huge disparity between local and international coal prices.
The domestic coal price currently averages around 20 U.S. dollars per ton under existing contracts between producers, industries and the government, while the international price hit the 90 dollars mark last week.
The government has been weighing up whether to implement the DMO policy on coal, under which producers would be obliged to allocate a certain percentage of the coal they produce for local consumption, reported English-language daily The Jakarta Post.
This year, Indonesia expects to produce up to 234 million tons of coal, against 203 million tons in 2007. Last year's export sales were recorded at about 170 million tons.
The domestic demand for coal is expected to rise significantly during the next two years as state-owned power company PLN starts to operate several new power plants. PLN's demand for coal is expected to soar to 70 million tons annually as of the end of 2009,from a current 30 million tons per year.
The demand for coal in the industrial sector is also expected to increase, with many companies switching to coal as an energy source due to the increasing price of oil and gas.
