HBA coal reference price down to $57.39 per ton

The government set its coal reference price (or better known as HBA) for October 2015 at US$57.39 per ton, down 1.4 percent from $58.21 per ton in September.

Director of Coal Management and Development at the Ministry of Energy and Mineral Resources, Adhi Wibowo said last week that the further decline in HBA for this month, the lowest since it was introduced in 2009, was in line with the falling coal price in the international market.

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 expected to complete next month the revision of 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. (*)