Indonesia has revoked its coal export ban on 759 companies allowing the restoration of shipments to foreign buyers such as Japan and China. A Ministry of Energy and Mineral Resources circular identified the companies that can resume exports after most of them met their domestic market obligation to sell 25% of their output to the local market. It said it gave the green light for the resumption of exports following “the results of the evaluation of the fulfilment of the coal DMO from 2021 to January 27, 2022”.

The move “effectively restores to normalcy” the country’s export of thermal coal and any further disruption in the coming months is highly unlikely, a ministry source told Lloyd’s List. “Short supply of coal to Perusahaan Listrik Negara’s power plants was a major factor that prompted the export ban,” he said. “But it no longer has this problem going forward after domestic coal producers committed to provide adequate supply. This was crucial in the lifting of the export ban on the 759 companies.”

Senior officials earlier banned all thermal coal exports until the end of this month, citing inadequate coal supply to power producers, notably state utility PLN. They warned that the shortfall could, in turn, cause widespread blackouts that could adversely affect the country’s economy. Failure of several coal producers to meet the mandated DMO requirement has been blamed for the short supply. Of the 759 companies that the energy ministry cleared to resume their exports, 37 had been cited for their failure to meet 100% of their DMO requirements last year. The ministry said that all 37 firms expressed their willingness to be “subjected to sanctions in the form of compensation for the lack of fulfilment of the 2021 DMO”.

The ministry source said there is no unfulfilled DMO requirement this month and failure to comply in February and in the coming months by any coal producer is unlikely following the government’s stern export ban which began on January 1. “From now on, the government will supervise closely and coordinate with PLN to identify companies which cannot meet their DMO obligations,” the source added.

He also dismissed as groundless concerns about a possible repetition of the coal export ban following the finance minister’s earlier statement about a government plan to stop from the middle of next year all exports of select minerals, including silver and gold, so they can be processed in the country. “Unlike other commodities, like silver, there is no way to process coal to produce any higher value product. So, coal is unlikely to be affected adversely in the event such export ban is imposed on select minerals,” he said.