Officially Use New Formula, This Is The Reference Coal Price In March 2023

Illustration (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has officially made a final decision regarding the new formula for reference coal prices (HBA) in Indonesia.

The changes are contained in the Decree of the Minister of Energy and Mineral Resources Number 41.K/MB.01/MEM.B/2023 concerning Guidelines for Determination of Patokan Prices for Sales of Coal Commodities.

Head of the Communications, Public Information Services, and Cooperation Bureau of the Ministry of Energy and Mineral Resources Agung Pribadi revealed that the formula for determining HBA is in principle aimed at obtaining reference coal prices that can be accepted by the market by taking into account state revenues.

"This consideration is the basis for issuing regulations related to prices based on market mechanisms," Agung explained in an official statement quoted on Monday, March 20.

Agung added that the HBA was formed from the average realization of the coal selling price two months earlier, with a proportion of 70 percent of the price realization one month earlier.

In addition, the formation of HBA was taken from 30 percent of the price realization two months earlier based on data on the realization of coal sales submitted by the Mining Business Entity at the time of fulfilling the obligation to pay coal royalties.

Referring to the new regulation, the Ministry of Energy and Mineral Resources has also set the HBA for March 2023.

First, HBA in the equity value of 6,322 kcal/kg GAR, Total Moisture 12.58 percent (twelve coma fifty-eight percent), total sulphur 0.71 percent (zero point seven-one percent), and Ash 7.58 percent (seven points fifty percent) set at 283.08 US dollars per ton.

"This price is used as a reference HBA during March in determining the royalty rate and at the calculation of HPB calories >6000," said Agung.

Furthermore, HBA in equity has a value of 5,200 kcal/kg GAR, a Total Moisture of 23.12 percent, a Total of Sulphur 0.69 percent, and Ash 6 percent. The determination categorized as HBA I is used as a reference HBA in the calculation of HPB calories of more than 5,200-6.000.

"This HBA I is set at the level of 136.70 US dollars per ton," said Agung.

Finally, HBA in equity has a value of 4,200 kcal/kg GAR, a Total Moisture of 35.29 percent, a Total Sulphur of 0.2 percent and a Ash of 4.21 percent is obtained at 102.26 dollars per ton.

"HBA II is used as a reference HBA in the calculation of HPB calories <=5,200," concluded Agung.

Prior to this new regulation, the determination of the HBA was obtained from the average index of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5500 in the previous month, with the quality equalized to 6322 kcal/kg GAR calories, Total Moisture 8 percent, Total Sulphur 0.8 percent, and Ash 15 percent.