Ministry maintains price margin of coal for mine mouth power plants
Tuesday, September 27 2016 - 03:01 AM WIB
The ministry said in a statement issued Thursday that while the new regulation stipulates that price margin of coal for mine mouth power plants projects will be based on agreement between the coal miners and mine mouth power plant companies, it maintains the previous margin range of 15-25 percent.
The price of coal for mine mouth power plant is determined based on a formula of production cost plus margin. The previous Ministerial Regulation No 9/2016 set the margin at 15-25 percent, which was protested by state-owned electricity firm PT PLN, which insisted the margin as too high given the current weak coal price environment. The protest has triggered the government to revise the regulation.
Meanwhile, coal miners have insisted for healthy margins to allow them to enjoy profit enough to finance exploration activities to help ensure future reserves to supply domestic power plant projects.
Editing by Reiner Simanjuntak