New HBA formula to be completed next month: Official

The Ministry of Energy and Mineral Resources (MEMR) is finalizing the planned new formula to determine the government?s coal reference price (or HBA), which is expected to be completed in early May.

This was said by the ministry?s Coal Chief Agung Pribadi on Friday. ?It is currently in the process of evaluation,? he said.

Under the new formula, to be stipulated by a ministerial regulation, the government will set a floor price for coal. Agug, however, declined to provide further details about the floor price.

Other changes include increasing the weighting of the Indonesia Coal Index (ICI) in the HBA formula from the current 26 percent. Other indices contributing 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.(*)