Pupuk Indonesia Adjusts Procurement Mechanism Amid Domestic Coal Supply Threats
PT Pupuk Indonesia is adjusting its procurement mechanisms to ensure coal supply as an energy source amid domestic supply threats. The company is implementing direct purchasing based on market availability as a short-term mitigation strategy. Coal accounts for 20% of Pupuk Indonesia's energy sources, primarily utilized by Pupuk Sriwidjaja, Petrokimia Gresik, and Pupuk Kalimantan Timur. The company is also enhancing energy efficiency and supporting sustainable energy initiatives, including solar power, as part of its decarbonization program.
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PT Pupuk Indonesia is adjusting its procurement mechanisms to address potential coal supply threats in the domestic market. The company plans to implement direct purchasing based on market availability as a short-term mitigation strategy.
Coal represents 20% of its energy sources, utilized by Pupuk Sriwidjaja, Petrokimia Gresik, and Pupuk Kalimantan Timur. To enhance energy efficiency, Pupuk Indonesia is optimizing gas-based power generation and increasing the use of renewable energy sources like solar power.
The company supports the Ministry of Energy and Mineral Resources' allocation policy to ensure more reliable coal supply for the fertilizer industry. The industry is entitled to a Domestic Market Obligation (DMO) price of $90 per metric ton, ensuring energy supply alongside the electricity sector. The target for DMO coal production this year is 75 million tons, sourced from coal mining companies according to the first-generation PKP2B agreements and state-owned enterprises.
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