Tighter Coal DMO Oversight Needed to Secure Power Supply

The Centre of Energy and Resources Indonesia (CERI) has called for stricter supervision of the Domestic Market Obligation (DMO) for coal to maintain the reliability of primary energy supplies for power generation. An evaluation of DMO governance is also seen as part of efforts to strengthen oversight in the mining sector.

CERI Executive Director Yusri Usman stated that DMO supply governance requires attention from all stakeholders, including the Ministry of Energy and Mineral Resources (ESDM) through the Directorate General of Minerals and Coal (Minerba). He noted that the ministry possesses monitoring instruments, such as the Mineral and Coal Information System (Simbara), which can be utilised to track company compliance with DMO requirements in real time.

“The Ministry of ESDM can check companies that do not fulfil their DMO obligations. They have Simbara with real-time information. Every miner must input data regarding production, royalties paid, DMO obligations, and so on,” Yusri said in a statement on Saturday.

CERI also believes that the export recommendation mechanism can be optimised as part of compliance supervision. Yusri explained that a company in violation would automatically be unable to secure an export permit, as miners cannot export without a recommendation from the Director General of Minerals and Coal to the Director General of Foreign Trade.

Furthermore, CERI views the effectiveness of sanctions against non-compliant companies as an area for evaluation to strengthen business compliance. Yusri highlighted a disparity in costs, noting that fulfilling the DMO costs producers around US$45 per tonne delivered to a coal-fired power plant, whilst the penalty for non-compliance is only US$5 per tonne. With international coal prices at approximately US$68 per tonne, a company choosing to export rather than meet its DMO could still profit by around US$17 to US$18 per tonne.

CERI suggests that optimising oversight instruments such as the Work Plan and Budget (RKAB), Simbara, and the export recommendation mechanism can strengthen governance of primary energy supply fulfilment for power plants. This assessment follows a recent announcement by the National Police’s Corruption Eradication Directorate (Kortastipidkor) regarding two companies suspected of involvement in coal procurement irregularities. CERI maintains that a comprehensive evaluation of coal supply is necessary.

The Directorate General of Minerals and Coal at the Ministry of ESDM has stated it is continuously strengthening oversight of DMO implementation for both the electricity and non-electricity sectors. Director General Tri Winarno said the government has assigned mining companies holding Work Plan and Budget (RKAB) approvals to supply coal to state electricity firm PT PLN. The total assignment volume is 212 million metric tonnes, exceeding PLN’s estimated 2026 requirement of 154 million metric tonnes. He added that as of May 2026, 144 million metric tonnes of the assignment had been contracted, with estimated deliveries reaching 130.5 million metric tonnes.