HBA coal reference price down to $54.43

The government set its coal reference price (or better known as HBA) for November 2015 at US$54.43 per ton, or 5.15 percent lower than the level in October at $57.39 per ton in line with the lingering decline in global coal prices.

The HBA has declined by 15.8 percent so far this year to its lowest level since 2009 when the reference price was first introduced.

Director of Coal Management and Development at the Ministry of Energy and Mineral Resources, Adhi Wibowo said Tuesday that coal price is expected to remain under pressure until end of this year amid weak global demand. He expected a slight recovery next year.

The HBA, used among others as reference to calculate coal royalty, is based on coal with CV (GAR) of 6,322 kcal/kg. It is calculated based on the monthly average of four coal indices: Indonesian coal Index/ ICI 1, Platts-1, New Castle Export Index, and Newcastle Global Coal Index.

The Ministry of Energy and Mineral Resources is in the process of revising the HBA formula, which would assign a greater weighting to the Indonesian Coal Index. Under the current formula, each index has the same weighting of 25 percent. (*)