Indonesia is gearing up to initiate a levy collection from coal miners starting in January, aiming to compensate those who sell coal to the state utility at reduced prices, announced the mining minister on Tuesday.

The scheme's introduction follows a recent coal supply crunch at local power plants, compelling the world's largest thermal coal exporter to temporarily suspend exports at the beginning of 2022. As part of regulations, Indonesian miners are obligated to sell a portion of their coal output to the state power firm, PLN, at a maximum price of $70 per metric ton and to certain local industries at a maximum of $90 per ton.

Officials highlighted issues arising when global coal prices soar, leading some miners to bypass these rules, causing disruptions in the supply chain.

Under the planned scheme, all coal miners will be mandated to pay levies, with the collected proceeds designated to compensate those miners adhering to the capped prices when selling to PLN. Energy and Mineral Resources Minister Arifin Tasrif emphasized the concept of fairness and a level playing field, indicating that this measure would ensure collective responsibility in supporting the government's domestic market obligations.

While no specific estimation of the levy amount was provided, the regulations and necessary infrastructure for the scheme's implementation are in the finalization phase, according to Minister Arifin. He expressed hope for a trial run in December, with full operation slated to commence on January 1, 2024, pending the completion of these preparatory measures.

Arifin Tasrif also mentioned that state-controlled banks such as Bank Mandiri, Bank Negara Indonesia, and Bank Rakyat Indonesia would be entrusted with the responsibility of collecting these funds. However, the scheme excludes coking coal miners, although they will still be obligated to fulfill their domestic sales requirements.