PLN, CCoW holders on 2011 coal prices negotiation stalled

State electricity company PT Perusahaan Listrik Negara (PLN) and coal producers, which hold coal contract of work (CCoW), are still divided on the reference prices for coal supply contracts for 2011 although the two parties have reached an agreement on the volume of the coal procurement.

In the negotiations, PLN demanded the coal prices to be based on the energy minister?s instruction No. 17/2010 which requires the coal prices for 2011 contracts to be based on the average prices during the fourth quarter, last year.

But coal producers insisted that the prices for coal contracts both for power plants owned by the state electricity company and those operated by independent power producers should be based on the latest price movement because the price movement during the fourth quarter no longer reflected the price trend.

Since October, last year, coal prices have continued its upward trend due to the lack of supply and natural disaster. The monthly reference price issued by the energy minister rose from US$92.68 per ton in October to $95.51 in November, $103.41 in December and $112.41 in January.

PLN said that the monthly price reference issued by the government during the last quarter of last year had already reflected the upward trend in the coal price in the world.

Meanwhile coal producers said that the price reference issued by Barlow-Jonker showed different trend. According to Barlow-Jonker index (NEX), coal price which reached $95.05 per ton in October continued rising in the following months to reach $104.2 in November, $110.20 in December and to $130.85 in January.

PLN requests to the government to make a clear decision to solve the problem.

PLN also said that so far, only one of CCoW holder has agreed with PLN on the price and volume of coal supply, but PLN did not revealed the name.

According to PLN?s earlier statement, PLN had just completed a negotiation with PT Arutmin Indonesia, on the coal supply for 2011. The two companies agreed to use the government?s guideline in the pricing for 7.2 million tons of coal to be supplied by Arutmin.

CCoW holders include PT Kideco Jaya Agung, PT Adaro Indonesia, PT Berau Coal and three other CCoW holder are currently negotiating coal price, PLN said in Dec 29. (godang/giok)