DGMC issues new decree on coal production cost benchmark
Friday, April 24 2015 - 02:55 AM WIB
The Director General of Mineral and Coal (DGMC) at the Ministry of Energy and Mineral Resources has issued new Decree No 579.K/32/DJB/2015 on production cost benchmark to determine base price of coal for mine mouth power plants or other uses.
According to the new decree, which was signed by Director General of Mineral and Coal R. Sukhyar on April 20, companies operating open-pit mines are obliged to follow the base price determined using the production cost benchmark.
In the case of underground mining, the miners can propose production cost plan to the DGMC for evaluation and approval.
Currency used in the calculation of the production cost is US dollar, using average exchange rate set by Bank Indonesia, the central bank, in the period of January 1-December 31 of the previous year.
Royalty tariff is set at 13.5 percent of coal price, which is calculated based on the formula of production cost plus 25 percent margin.
Following is the production cost benchmark applies for open-pit mining.
| No | Cost Type | Unit | Cost |
Direct production cost |
|||
| 1 | Overburden removal | USD/bcm | 2.41 |
| 2 | Overburden transport | USD/ton/km | 1.74 |
| 3 | Coal digging | USD/ton | 1.70 |
| 4 | Coal transport from mine to processing facility | USD/ton/km | 0.28 |
| 5 | Coal transport from processing facility to stockpile of power plant | USD/ton | Agreement between miner and IUPTL permit holder |
| Indirect production cost | |||
| 6 | Coal processing | USD/ton | 1.98 |
| 7 | Amortization and depreciation | USD/ton | 6.88 |
| General cost and administration | |||
| 8 | - Supervision and management of environment, reclamation and post mining | USD/ton | 0.55 |
| - Work health and safety | |||
| - Empowerment and community development | |||
| 9 | Overhead | USD/ton | 2.07 |
| 10 | Regular fee | USD/ton | 0.11 |
| 11 | Production fee/royalty assumption | USD/ton | 20.3% |
| 12 | Margin | USD/ton | 25% |
Editing by Reiner Simanjuntak