ICMA calls for special coal price scheme

The Indonesian Coal Mining Association (ICMA) has demanded the government to apply a special pricing scheme of production cost plus margin for coal dedicated for coal-fired power plant projects in the country.

The cost plus margin price scheme currently only applies on mine mouth power plant projects. The margin is set at 15-25 percent, Bisnis Indonesia reported Friday.

ICMA Chairman Pandu P. Syahrir said on Thursday that it is no longer relevant to differentiate between coal-fired power plant and mine mouth power plant projects. He added that the cost plus margin pricing formula would help ensure sustainable supply of coal for the domestic power plants and help coal miners deal with the current coal downturn.

ICMA has previously said that the current drop in coal price has discouraged many miners from carrying out exploration activities to find new reserves, putting at risk future supply of coal for domestic power plants. (*)