Govt to revise coal price reference formula

The Ministry of Energy and Mineral Resources plans to revise the Indonesian coal price reference (HBA) formula to provide support to the price of the commodity, Investor Daily reported on Friday.

The paper quoted the ministry?s Director of Coal Management and Development, Adhi Wibowo as saying that while Indonesia is the world?s largest producer of low rank coal, the current HBA formula is largely based on international indices including Index Platts59, New Castle Export Index, New Castle Global Coal Index, and Indonesia Coal Index (ICI).

Adhi declined to disclose the new formula, saying that it was still being reviewed.

The HBA for July fell to US$59.19 per ton, in line with the global drop in coal price, its lowest level since the reference price was introduced in 2009.

Adhi said that the drop in coal price has contributed to the falling coal production in the country. During the first half of this year, the country?s coal output fell by 17 percent to 202.7 million tons compared to 245.5 million tons in the same period of last year. Adhi, however, is optimistic that the full-year target of 425.5 million tons can still be achieved. (*)