Government issues new decree on coal production cost benchmark
Wednesday, November 4 2015 - 06:08 AM WIB
The Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources has issued new Decree No 953.K/32/DJB/2015 on production cost benchmark to determine base price of coal for mine mouth power plants and non-mine mouth power plants within one island.
The new decree, effective October, replaces the previous Decree No 579.K/32/DJB/2015 issued in April.
According to the new decree, 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 directorate general for evaluation and approval.
Coal price set based on the previous decree remains valid until its expiry.
Following is the production cost benchmark applies for open-pit mining
| No | Cost Type | Unit | Cost |
Direct production cost |
|||
| 1 | Overburden removal | USD/bcm | 2.17 - 2.41 |
| 2 | Overburden transport | USD/ton/km | 0.87 - 1.74 |
| 3 | Coal digging | USD/ton | 1.55 - 1.70 |
| 4 | Coal transport from mine to processing facility | USD/ton/km | 0.20 - 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 | 1.19 - 1.98 |
| 7 | Amortization and depreciation | USD/ton | 5.50 - 6.88 |
| General cost and administration | |||
| 8 | - Supervision and management of environment, reclamation and post mining | USD/ton | 0.50 - 0.55 |
| - Work health and safety | |||
| - Empowerment and community development | |||
| 9 | Overhead | USD/ton | 1.66 - 2.07 |
| 10 | Regular fee | USD/ton | 0.10 - 0.11 |
| 11 | Production fee/royalty assumption | USD/ton | 20.3% |
| 12 | Margin | USD/ton | 25% |
Editing by Reiner Simanjuntak