Coal price formula for mine mouth power plants to be revised
Monday, August 31 2015 - 01:24 AM WIB
Director for Coal Development and Management at the ministry, Adhi Wibowo said that the revised formula is expected to be issued next week following completion of discussions with industry stakeholders.
Currently, coal price for mine mouth power plant projects is determined based on a formula of production cost plus a 25 percent margin.
Under the planned new formula, coal miners will be free in determining the level of margin as long as it does not exceed the 25 percent limit, which would allow better competition among the miners in supplying coal for mine mouth power plant projects. This will hopefully help reinvigorate domestic coal market.
?After the Directorate General (of Mineral and Coal Regulation No 579.K/32/DJB/2015) is revised, the margin will be set free. It can be 5 percent, 15 percent, as long as the limit is 25 percent. So, businesses can compete to get the most competitive price,? Adhi said.
As compensation, the ministry will also determine the royalty to be paid by miners based on the rate of margin, Adhi added. (*)