MEMR issues coal price formula for mine-mouth power plants
Thursday, March 5 2015 - 02:41 AM WIB
The Director General of Coal and Mineral at the Ministry of Energy and Mineral Resources (MEMR) issued new Decree No 466.K/32/DJB/2015 on the formula to determine coal price for mine-mouth power plant projects and domestic other purposes.
According to the decree, obtained by Petromindo.com on Thursday, the coal price is determined based on a formula of production cost plus a 25 percent margin.
The decree, which was signed on February 24, also provides detailed breakdown of the production cost benchmark that must be followed by open-pit mining operators. Underground mining companies must submit their own cost structure to be reviewed and approved by the directorate.
Following is the breakdown of the coal production cost benchmark as stipulated by the decree.
| No. | Type of cost | Unit | Cost |
| Direct production cost | |||
| 1. | Overburden removal | US$/bcm | 2.41 |
| 2. | Overburden transport | US$/bcm/km | 1.74 |
| 3. | Coal digging | US$/ton | 1.70 |
| 4. | Coal transport from mine to processing location | US$/ton/km | 0.28 |
| 5. | Coal transport from processing to location of mine-mouth power plant | US$/ton | Agreement between the miners and power plant firms |
| Indirect production cost | |||
| 6. | Coal processing | US$/ton | 1.98 |
| 7. | Amortization and depreciation | US$/ton | 1.17 |
| General and administration cost | |||
| 8. | Monitoring, environmental, reclamation, and post mining | US$/ton | 0.27 |
| 9. | Work safety and health | US$/ton | 0.07 |
| 10. | Community development and empowerment | US$/ton | 0.21 |
| 11. | Land acquisition/compensation | US$/ton | 1.99 |
| 12. | Overhead | US$/ton | 2.07 |
| 13. | Fixed fee | US$/ton | 0.11 |
| 14. | Royalty/production fee assumption | US$/ton | 20.3% |
| 15. | Margin | US$/ton | 25% |
Editing by Reiner Simanjuntak