ICMA suggests Newcastle index be removed from HBA formula
Thursday, September 12 2013 - 03:37 AM WIB
The Indonesian Coal Mining Association (ICMA) supported plan by the Ministry of Energy and Mineral Resources (MEMR) to revise the current coal price reference formula, or better known as HBA, and suggested to scrap the Newcastle index from the formula.
"We are one of the largest coal exporters, so we do not need foreign coal price index such as Newcastle," ICMA Head for Commercial Committee Pandu Sjahrir said on Wednesday.
The government of Indonesia has been issuing the monthly HBA since 2010. The reference price is calculated based on the average of previous month?s Indonesia Coal Price Index (ICI-1), Platts-1, Newcastle Export Index (NEX), and the Newcastle Global Coal Index (GC).
Gultom Guskha, Head of Marketing and Production Supervision at the Directorate General of Coal and Minerals at MEMR, said late last month that the planned revision would be focused on revising the weighting of each component of the price reference.
?Going forward, the percentage of each indexes will be adjusted with the current number of users of the index in the market,? Gultom said, while adding that under the planned revision, the government will also introduce different types of HBA such as HBA1, HBA2, and HBA3, depending on the calorific value (GAR) of the coal.
He said that the ministry was currently awaiting for inputs from the industry players to make the revision.
Editing by Reiner Simanjuntak