Indonesia plans to start collecting levies from coal miners beginning in January in an effort to maintain steady domestic supply, Minister of Energy and Mineral Resources Arifin Tasrif said on November 21.

The Southeast Asian nation, the world's largest exporter of thermal coal, experienced a domestic supply shortage at the beginning of 2022, as miners preferred to export to seek higher profit rather than sell domestically at capped prices.

Indonesia requires miners to sell at least 25% of output to state utility Perusahaan Listrik Negara (PLN) at a maximum price of $70/t and to certain local industries at $90/t, which is known as the "Domestic Market Obiligation".

Under the new scheme, all coal producers will have to pay levies which will then be used to compensate miners that sell to PLN.

"This will create fairness and a level playing field. Everyone will share responsibility in supporting government programs for domestic market obligations," Tasrif told at a parliament hearing.

The minister said regulations and infrastructure needed for the scheme implementation are close to be completed. Upon completion, the government is likely to take a trial run in December for the official operation in January.

State-controlled Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia will be appointed to collect the funds, he added.

Coking coal miners will be excluded from the scheme, Arifin said, but they would still be required to meet their DMOs.

(Writing by Alex Guo  Editing by Emma Yang)
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