Regulation on procedures to determine coal benchmark price issued
Wednesday, March 27 2013 - 04:06 AM WIB
The Directorate General of Mineral and Coal issued a new regulation on procedures to determine coal benchmark price (HPB) subject to certain cost adjustments either by way of addition or reduction as part of the government?s efforts to ensure certainty in running mining business in Indonesia.
The regulation of Directorate General of Mineral and Coal (Perdirjen No.644/2013) which amended Perdirjen No. 999/2011 on procedures for determining cost adjustments of coal benchmark price has taken into effect by March 21, 2013.
According to a copy of the decree obtained by Petromindo.com Tuesday, the regulation stipulates among others the holders of production operation IUP/IUPKs selling coal on basis of free on board barge (FOB barge) and by sales to domestic end consumers (in the same island) are obliged to apply benchmark price subject to certain cost adjustments.
Article 4 (1) says the cost adjustments for coal sales conducted in basis of FOB barge would include transshipment of US$4 per ton, barge (depending on its feet capacity), surveyor cost of $0.25 per ton and insurance cost of 0.8 percent per shipment, while the benchmark price of coal sold for domestic users located in the same island should be adjusted with the costs of transshipment, barge, surveyor, insurance, truck or railway.
Holders of Production Operation IUP/IUPKs selling coal in basis of the Cost Insurance Freight (CIF) are obliged to show the price of Free on Board vessels. The holders of must also use services of national or domestic insurance companies.
The new regulation also regulates the calculation on coal royalty that should be paid by the holders of Production Operation IUP/IUPKs to the government
Editing by Adianto P. Simamora