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UPDATE 1-Indonesia issues coal, metal decree - document

Wed Jan 13, 2010 4:39pm IST

* Domestic sales requirements imposed on metal, coal miners

* Miners can export if they can meet requirements

* Document seen by Reuters says decree issued at end-2009 (Updates with confirmation, details)

JAKARTA, Jan 13 (Reuters) - Indonesia has imposed a requirement for metal and coal miners to set aside a certain amount of their production for domestic needs, a document from the energy and mines ministry showed on Wednesday.

The market has been closely watching if the world's largest thermal coal exporting country will switch more coal output to home use and away from exports, particularly given the rapid growth in import demand from Asian giants China and India.

Thermal coal prices on the globalCOAL Newcastle weekly index, a benchmark for Asia, stood at $98.36 a tonne on Wednesday, the highest since early November 2008, partly lifted by robust Chinese demand.

Bambang Setiawan, director general of coal, minerals and geothermal at the energy ministry, confirmed in a mobile phone text message that a ministerial decree has been issued but did not elaborate.

The document, seen by Reuters, was signed by Energy and Mines Minister Darwin Zahedy Saleh on Dec. 31, 2009, for immediate effect and said the government would set a minimum percentage for domestic sales of coal and mineral each year.

This percentage will be calculated based on total domestic consumption of coal or minerals, divided by the total production of coal or minerals.

Coal and metal miners can export their products as long as they are able to meet the minimum percentage, according to the document.

The document also said another minimum domestic sales percentage, which has been set before the decree was issued and included in the 2010 plan, would continue to be effective.

The government has earlier set domestic coal consumption at 75 million tonnes for this year, or about 30 percent of 2010 coal production estimated at 250 million tonnes. (Reporting by Fitri Wulandari; Additional reporting by Muklis Ali; Editing by Choonsik Yoo)

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