Indonesia Orders Miners to Provide More Coal Amid Blackouts
(Bloomberg) -- Indonesia’s energy ministry directed miners to urgently boost domestic coal supplies just before the country was hit by rolling blackouts, the latest strain on President Prabowo Subianto’s administration following a week of protests.
The Energy and Mineral Resources Ministry told miners to supply an additional 2.7 million tons of coal to power plants this month, according to a letter dated June 12 seen by Bloomberg News. It cited a ministerial decree allowing the government to force producers to prioritize domestic sales if local needs are not met.
The extra demand amounts to about 2% of the total coal contracted so far this year by state power firm Perusahaan Listrik Negara.
The Energy Ministry didn’t immediately respond to a request for comment.
Rolling blackouts last week across Java — Indonesia’s most populous island — are the latest setback for Prabowo, whose administration has been rocked by protests, corruption scandals and the economic fallout from the US-Iran war. The former general has unnerved investors with his fiscal expansion and policy making, leading to a sharp decline in the local currency.
Indonesia, the world’s top exporter of thermal coal, sharply cut its production this year by tightening government-issued mining quotas in an effort to boost prices. Power blackouts have triggered scrutiny over that policy.
Energy Minister Bahlil Lahadalia, though, said in a Sunday statement that the power outages were caused by technical issues rather than a shortage of coal. Darmawan Prasodjo, president of PLN, said the power disruptions were caused by problems at two large power plants on Java.
Indonesian miners are required to sell a proportion of their coal to domestic consumers, including power plants, each year, usually at below-market prices. Their obligations are often set at the start of the year.
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