[Editorial] Odd coal import plan of Indonesia's utility company - The Korea Herald

The revelation made last week by Dahlan Iskan, president of state-owned electricity company PT PLN, of a plan to import around nine million tons of coal next year when Indonesia is the world’s top seaborne exporter of thermal coal with annual shipments of almost 190 million tons, implies several things, all of which are negative for the country’s energy policy.

Even though Coordinating Economic Minister Hatta Rajasa immediately shot down the PLN idea as ridiculous, Dahlan’s statement made after a meeting with the House of Representatives last Thursday could either indicate the government’s impotence to enforce the domestic market obligation (DMO) imposed on coal miners since early this year or his frustration in dealing with corruption ingrained in the company’s procurement system.

PLN importing thermal coal would indeed be a very odd corporate decision that would unnecessarily increase electricity rates given the high cost of transporting the resource and the larger stocks that have to be managed to minimize supply interruption (inventory costs).