MEMR to unveil new coal reference price formula soon
Tuesday, May 31 2016 - 01:14 AM WIB
The Ministry of Energy and Mineral Resources (MEMR) will soon announce a new formula in determining the government?s coal reference price (or HBA), according to a senior official.
"The new formula will be announced soon and it will be more beneficial for domestic coal producers," Director General of Mineral and Coal Bambang Gatot Ariyono said on the sidelines of Coaltrans Conference on Monday.
He said that under the new formula, the weighting of Indonesia Coal Index (ICI) will be higher than the current 25 percent.
The new coal price reference formula, Bambang said, will be $1 or $2 more higher than the
Other indices contributing to the current formula include Index Platts59 (25%), Newcastle Export Index (25%), and Newcastle Global Coal Index (25%). Coal miners have proposed for the government to reduce the weighting of the international indices given the lingering drop in the price of coal in the international market.
The Indonesian Coal Mining Association (ICMA) has previously urged the government to provide incentives for coal miners including a better pricing scheme amid the lingering coal price drop to encourage them to continue exploration activities to find new reserves that would help ensure future coal supply for domestic power plants.
Editing by Reiner Simanjuntak