By Romel S. Gurky
The Ministry of Energy and Mineral Resources has set lower coal reference prices, better known as HBA, for April transactions compared to March in line with declining coal prices in the global market.
The ministry since March has issued three monthly thermal coal reference prices for three different coal qualities, using a newly introduced formula to determine the HBA. Previously, the ministry only announced one level of HBA.
The ministry said in a statement Thursday that the April HBA for coal benchmark with qualities of calorific value of 6,322 kcal/kg GAR, total moisture 12.58%, total sulfur 0.71%, and ash 7.58% is set at US$265.26 per tonne, lower than $283.08 in March.
The April HBA for coal with qualities equivalent to calorific value of 5,200 kcal/kg GAR, total moisture 23.12%, total sulfur 0.69%, and ash 6% is set at $102.53 per tonne, lower than $136.70 in March. This HBA is the reference price for coal with a CV of 5,200-6,000 kcal/kg.
Finally, the April HBA for coal qualities of 4,200 kcal/kg GAR, total moisture 35.29%, total sulfur 0.2% and ash 4.21% is set at $87.81 per tonne, lower than $102.26 in March. This is the reference price for coal with a CV of less than 5,200 kcal/kg.
Read also: Ministry sets March coal HBA using a new formula
Under the old formula the monthly HBA was determined based on the average of four international coal price indexes of the previous month, namely the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900, with coal qualities equivalent to 6,322 kcal/kg GAR, 8% total moisture, 0.8% total sulfur, and 15% ash as the benchmark. Each of the indexes carries the same weighting of 25 percent.
In the new formula, the ministry sets three HBA reference prices for three coal benchmarks, which are determined based on the average of the aforesaid international coal price indexes of the previous two months (30% proportion) and of the previous one month (70% proportion).
The issuance of the new formula to determine the HBA was made following request from the Indonesian coal miners who have claimed that the HBA based on the old formula was unfair to them as they had to pay much higher royalty based on the HBA as reference, while their actual coal selling prices were mostly based on the ICI, which was relatively much lower than the two other indexes, namely NEX and GCNC.
Editing by Reiner Simanjuntak
