Govt to change price margins of coal for mine mouth power plants

The Ministry of Energy and Mineral Resources (MEMR) has decided to change the current price margins of coal dedicated for mine mouth power plant projects in the country following request from state-owned electricity firm PT PLN, which sees the margins set in the current price formula as too high considering the current weak coal price environment.

Director General of Mineral and Coal at the ministry Bambang Gatot Ariyono was quoted by Kontan as saying on Saturday that the ministry will revise the Ministerial Regulation No 9/2016 on the price formula of coal dedicated for mine mouth power plants. ?We?ll revise the ministerial revision, there will certainly be revision of the margins,? he said, but did not further elaborate.

The current ministerial regulation sets the price of coal for mine mouth power plants based on a formula of coal production cost plus a 15-25 percent margins, which PLN said are too excessive.

Hendra Sinadia, a deputy at the Indonesia Coal Mining Association, expects that any revision into the price margins would not cause coal miners to suffer losses to ensure sustainable production of coal. (*)