06 Nov 2018

THE NEW SELLING PRICE OF COAL FOR PROVISION OF ELECTRIC POWER FOR THE PUBLIC INTEREST

The Minister of Energy and Mineral Resources (“MEMR”) released a new regulation regarding the selling price of coal for provision of electric power for the public interest registered under number 1395 K/30/MEM/2018 (the “Regulation”) on 09 March 2018. This Regulation is released by considering the MEMR Regulation Number 19 of 2018 on the Second Amendments of MEMR Regulation Number 7 of 2017 on the Procedures of Setting Benchmark for Selling Prices of Metallic Minerals and Coal.

The Regulation stipulates the selling price of coal for provision of electric power for the public interest by domestic power generation plants at USD 70  per metric ton (seventy united states dollar) Free on Board (FOB) Vessel with calorific specification value of 6,322 kcal/kg GAR, total moisture of 8% (eighty percent), total sulphur of 0.8% (zero point eight percent) and Ash of 15% (fifteen percent).

If the specification is different from above, the calculation shall be made with the following:

HBA* ≤ USD 70

Calculate with coal price formula in the Attachment II of the Regulation

HBA * ≥ 70

Calculate with coal price formula in the Attachment I of the Regulation

This selling price of coal shall apply since 1st January 2018 up until December 2019 with a maximum volume of sales of 100 (one hundred) million metric tons per year. This means, the sales contracts that still on going must be adjusted.  The stipulation of this price only applies for national sales of electricity, while the selling price of coal other than for this purpose shall continue to refer to the reference coal price.

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