The nation is the world leader in thermal coal production and a significant exporter to China, and the decree signed on New Year’s Eve binds producers to an annual domestic market obligation.

The decree states the DMO for the country’s producers will match the estimate of annual thermal coal demand put forward by domestic customers in the previous 12 months, according to the Jakarta Post.

The newspaper tipped domestic coal demand to reach 75 million tons in 2010 while last year domestic demand was 56Mt of the 254Mt output.

Failure to meet DMO obligations will reportedly result in sanctions that could go as far as forcing producers to cut 50% of output.

The government move combats the lack of coal supply in the country as domestic consumers fail to match the higher prices found in export markets.